China Lifts Oil Imports Quota

China will allow private companies to increase oil product imports by 15 percent from 8.05 million tons last year to 9.26 million tons in 2007 as energy demand rises, the Ministry of Commerce said in a statement recently.

The oil products include gasoline, gas oil, kerosene, naphtha and fuel oil. Companies matching certain criteria, such as those with a registered capital of more than 50 million yuan (US$6.4 million) and with no record of violating regulations, can apply for an import quota from January 1 to 15, the ministry said. However, an oil product wholesaler is only required to have a minimum registered capital of 30 million and storage of more than 10,000 cubic meters.

As part of its commitment to the World Trade Organization, China has been raising import quotas for oil products since 2002, but whether privately owned companies can make profits from it depends on international oil prices and adjustment of the domestic oil products pricing mechanism. If international oil prices continue to rise, the import quotas cannot possibly be fully used.