''We are starting to import [for delivery] in May, but crude imports are only allowed through Sinochem and Unipec. There are no other channels of import,'' said a source at the China International United Petroleum and Chemical Co Ltd (Unipec).

Sinochem is the China National Chemicals Import and Export Corp.

One of the reasons for lifting the ban is that on Wednesday Beijing announced that oil product prices in Dalin, the Yangtze Valley and Guandong had started to recover from a trough caused by over-supply.

The statement admitted that prices had not yet begun to recover in three northeastern provinces.

Before the ban, key refineries in Maoming, Guangzhou, Ningbo and Kaochiua were allowed to import directly, largely because the country's over-taxed infrastructure system made it difficult to move oil from China's own northern fields, and demand in the industrialised coastal regions had soared with the introduction of free-market reforms.

The imported oil was cheaper than the domestic product, and the explosive demand sparked a rapid drain of foreign currency.

''The-free-for-all nearly bankrupted the country,'' said a Singapore-based trader, with perhaps some exaggeration.

Fearful of losing control of the overheating economy, the government introduced the ban to halt the currency drain and to reduce swollen stock levels. At the time, however, one analyst said that the ban ''is not a sign of a plan but a sign of anarchy''.

Fereidun Feshaki, head of energy programmes at Hawaii's East-West Centre, said: ''Generally, the energy sector in China is out of control; the whole structure is unravelling.'' The oil import ban was officially imposed on March 1 to stem mounting cheap imports into what has become the world's most dynamic oil market, and to protect domestic crude and and refined product sales.

Customs figures show Chinese crude oil imports in January this year soared to 480,000 tonnes, a 454 per cent rise on the same month last year. The total for 1993 was 310,000 barrels per day (bpd) compared to 227,000 bpd for 1992.

The problem was compounded by a rush late last year to fill storage tanks before a new 17 per cent value-added tax was imposed on January 1.

Also in January, imports of refined petroleum products grew 111 per cent to 660,000 tonnes.

Imports of these products would in future be primarily confined to Sinochem and Unipec but it was not clear at that stage if the special economic and technological development zones would be allowed to import directly, the Unipec source said.

Another effect of the ban was to halt the expansion of Shantou Ocean Enterprises in Guangdong, which set up an oil and petroleum trading office in Singapore at the beginning of March and which looked set to challenge Sinochem's grip on the international petrol trading.

''The controlling bodies are only Unipec and Sinochem now, and it depends on how Sinochem, for example, distributes between its Hong Kong, Singapore and London arms,'' a Singapore-based trader with close Chinese business links said on Friday.

Apart from limiting the import agencies, China's State Planning Commission will strictly oversee the volume of oil imports through issue of a restricted number of import licences, now done quarterly instead of yearly.

Aside from limiting the number of import agencies, China's State Planning Commission will strictly oversee the volume of oil imports through issue of a restricted number of import licences, now done quarterly instead of yearly.

''Liberalisation is one thing, quantum another. They are not going to import as much as they did before . . . inquiry will be very tame and thin,'' a Singapore-based trader said.

Sources at Sinochem and Unipec said crude oil imports would be between one million to two million tonnes in May, in line with the country's earlier projection of 20 million tonnes in 1994 (1.67 million tonnes per month).

Foreign oil sources said the tight grip over who could move oil into the country would keep imports well-regulated.

In a related development, on Wednesday, China's Ambassador in the United Arab Emirates announced another strategy to help the government to re-gain control of the oil sector.

Negotiations have started for a long-term arrangement under which China would buy crude and other products directly from the UAE. China now buys these on the spot market, even though exports to the UAE accounted for more than US$700 million of the total bilateral trade of $810 million last year.

Last month the government announced it was to import 3.5 million tonnes of crude from Saudi Arabia annually from 1995, and a similar long-term arrangement between China and the UAE would facilitate planning.

However, most analysts are sceptical that an agreement with the UAE would result in the import of large volumes of crude from that country.

For one thing, most UAE oil is exported to Japan and some of the existing contracts would have to be re-negotiated if China were to receive a larger share of production. More significantly, UAE oil is high in sulphur and even if most of the country's crude was exported to China it would not be suitable for all the country's refineries.

''I doubt China has enough de-sulphurisation capacity to process large volumes of UAE product,'' said a Tokyo-based expert.