New | China sets new rules to allow more refiners to import oil

China yesterday introduced new regulations paving the way for smaller refining firms to import crude oil, as it looks to encourage private investment in a sector dominated by big state-owned firms.

Under rules posted by the National Development and Reform Commission, refiners will be able to apply for access to imported oil if they meet new technical and environmental standards. Firms can then apply to the Commerce Ministry to import oil.

The NDRC said the new measures were aimed at "solving the crude oil supply problems of regional refining enterprises".

China, the world's second-largest oil consumer, regulates its oil imports through a quota system to ensure stable supply. State-owned Sinopec Corp and PetroChina account for nearly 90 per cent of imports, while almost all of the rest is imported by firms associated with the big two.

The government has pledged to allow more private participation as part of a broader move to reform its clunky and inefficient state-owned sector.

Independent oil refineries, a main swing supplier of the world's second-largest fuel market, have been eagerly awaiting the changes. Deprived of crude oil as feedstock, the plants have to import lower-quality fuel oil for processing into petrol and diesel.