The government has approved 24 more companies to run the wholesale business of oil products. It is the first time in four years for the government to issue such licences.

This is another move for the government to open up the once-tightly controlled market to domestic players before it is is completely exposed to foreign giants in 2006 under China's commitment to the World Trade Organization.

An official from the Ministry of Commerce said the licences were released in late September, and more wholesale licenses are expected to come out in following months.

The official, who is involved in supervising the business, indicated that some of the 24 companies are private companies, including the domestically listed Hubei Tianfa Group, which is an oil products trader.

Some others are affiliated with Sinopec and PetroChina, the nation's largest two oil companies.

The official declined to provide the names of the companies.

In a market overhaul in 1999, the government recalled thousands of wholesale licenses for refined oil products and consolidated the business into PetroChina and Sinopec. The government hopes the move could help the two companies get a better grip of the market and underpin the prices to sustain the revenues of their lumbering refineries that absorb millions of workers and contribute the bulk of tax revenues to the government.

Still, experts said the market will not be reshuffled with the participation of the new players because PetroChina and Sinopec are still control the most of the oil supply to wholesalers, and because the oil imports are tightly controlled by State traders.

PetroChina and Sinopec make up over 90 per cent of China's refined oil products output.

"The competition is limited when you cannot secure the oil supply," said an energy expert with a Beijing-based consulting company. "The big two still have enough to manipulate the market."

Sources said the government is studying new regulations to reform the administration in the retail and wholesale on the oil market.

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