China's new oil product import rules are hindering fuel oil imports due to delays in implementing the new system and are too vague and stringent to allow smooth trading, industry participants said Wednesday.

Officially, China abandoned the import quota system for all refined oil products from Jan. 1.

Under the new system, companies only need to be approved and granted licenses to import refined oil products.

"Most of the trading houses' licenses have been approved, but so far, very few in Guangzhou have been granted the licenses," said a trader based in Guangzhou city.

Huangpu port, in southern China's Guangdong province, is the country's largest import terminal for fuel oil, accounting for an estimated 60%-70% of last year's total import volume of 22.3 million metric tons.

Traders also said the relevant authorities haven't announced how much each company will be allowed to import every month.

Trading houses will also need to register and report to the Ministry of Commerce one month before the arrival of a cargo on the volume, seller and origin of the oil product.

"How do we know who we will buy (the oil product) from one month earlier? We buy when the price is right, whatever the origin, whoever it's from," the first trader said.

Because of the delay in issuing licenses and uncertainty under the new system, trading houses in southern China have been importing through state-owned enterprises.

"Fuel oil importers are still going through the state-owned companies like Sinopec and Sinochem, which act as agents for these importers," said a senior executive of a major fuel oil wholesaler based in Guangzhou city.

According to industry sources, the companies pay an average 20-25 yuan a ton to the state-owned companies to act as import agents.

Some traders lament that the new import system isn't helping companies to trade, and the rules add unnecessary risks to import fuel oil.

"It seems like we are taking a step backward with each rule the government implements," said the company executive.

Officials at Guangdong province's Department of Foreign Trade and Economic Cooperation, the local department in charge of governing the new import system, weren't immediately available for comment.

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