Zhao Youshan: Oil Market Should Introduce Competition Mechanism

Twenty years ago, private oil companies in the Chinese oil industry once controlled more than 80% of the domestic market. After the glory, the power of this group has shrunk year by year, but even so, as of today, there are as many as hundreds of billions of oil trade in China. The share held by private oil companies still occupies half of the country.

This group of people is usually extremely mysterious and it is nearly half a century old. Many of them have legendary wealth experiences. In this circle formed by oil tycoons, the vast majority of people choose to deliberately hide outside the focus of the media. They have a lot in common. In addition to being involved in the oil industry, their greatest commonality is to hold high the anti-monopoly. Banner.

Among this group of people, Zhao Youshan, chairman of the 61-year-old oil circulation committee of the China Business Confederation, is now the leader of the domestic private oil companies in the monopoly barriers. In his own words, he entered the oil market from the age of 48. Although the 12-year anti-monopoly road still has no results, he still insists.

"I think now why is it better than the eight-year war, which is even more difficult than the 25,000-mile Long March? Why? This is the question of the interests of various departments." Zhao Youshan said.

Half of the monopoly under the ice

"Private enterprises will not allow the import of crude oil, nor will they import refined oil. The two major groups will not give it anymore. The development of private enterprises will undoubtedly be restricted."

"21st Century": Many people do not have a specific understanding of the status of private oil companies in the domestic oil industry. How much does a private oil company as a force outside the national oil giant occupy the market? character of?

Zhao Youshan: In 1992, under the call of Deng Xiaoping’s reform and opening up, private capital began to enter the oil market. Our private enterprises also developed rapidly, once occupying 85% of the market. In 1998 (after PetroChina and Sinopec were established), private enterprises’ The production space has been squeezed, and by 2005 it had become about 50%, and now it is more than 40%.

Private enterprises rely on themselves without any support from the country. Some people don't know much about private companies. Some think that private companies have money. To tell the truth, private companies' money is not easy to come by.

"21st Century": Although private companies still occupy more than 40% of the domestic oil trade market, compared to the glorious period, the survival of private capital is very prominent. In your opinion, what are the reasons?

Zhao Youshan: Since the development of the reform and opening up, private oil companies have grown from small to large, from weak to strong, and from strong to weak. The reason is that our country’s policy is not fair to our private oil companies. Policies, compared with state-owned oil companies, are not treated equally.

There is no competition mechanism in our country's oil market. The country will give the resources to two large groups without compensation. Private enterprises will not allow the import of crude oil, nor will they import refined oil. The two big groups will not give up, and the development of private enterprises will undoubtedly be restricted. .

Policy out of touch

"Reducing the pricing cycle will not solve the problem in essence, and it will even bring serious economic losses to private enterprises and even bankruptcy."

"21st Century": In order to promote the market-oriented reform of the oil market, you used to write several letters in the name of the association, including the State Council, the Ministry of Commerce and other related departments. How many documents have been submitted so far?

Zhao Youshan: Since the establishment of the Petroleum Distribution Committee, it has been reflecting on the company’s appeal as an important task, striving for policy support, and responding to various departments through various channels.

Among them, since 2006, the Petroleum Distribution Committee has reported to the State Council, the National Development and Reform Commission, and the Ministry of Commerce the practical difficulties of oil shortages, zero-pending upside down, etc., and eventually contributed to the NDRC and the Ministry of Commerce's 2008 document No. 602, No. 1718, No. 7 of 2009. The introduction.

Since then, we have repeatedly reported to the State Council and other departments that after the levy of the fuel oil consumption tax, the production costs of fine chemical companies have risen and the company has faced losses. It has also received great attention from Premier Wen Jiabao and Vice Premier Li Keqiang. In August 2010, the Ministry of Finance and the State Administration of Taxation issued the Document No. 66 of Finance and Tax [2010], which stipulates that fuel oil shall be subject to tax deduction for consumption tax in accordance with naphtha.

"21st Century": The introduction of the new "36" has been interpreted by industry insiders as private capital is expected to participate in policy breakthroughs in key areas such as oil. How do you view it?

Zhao Youshan: I think that the introduction of the two "36" and 36 "old" countries in our country is relatively reasonable. I think that it is unreasonable to introduce the new "36".

Allowing private enterprises to participate in the new "36" requires the premise that they have to eat hard, their food and clothing problems have not yet been resolved, how can they participate in such a big project? The new "36" has detailed rules, and we hope that this detailed rule should be heard more. Regarding the views of private enterprises, some policy makers are not very familiar with private enterprises. The introduction of the new "36" should be well studied and then introduced, and the current state of existence of private enterprises should be given proper consideration.

"21st Century": Reform of the refined oil pricing mechanism is also one of the focuses of all parties. As far as I know, you are always against reforms. What are your reasons?

Zhao Youshan: Under the premise that the market has not formed sufficient competition, shortening the pricing cycle cannot fundamentally solve the problem. It may even cause serious economic losses to private enterprises and even bankruptcy.

Private oil companies need to go through multiple links in the process of oil circulation. These links will take about ten days to half a month, and the time left for the company to turn around will be counted. The characteristics of refined oil circulation determine that the price changes will be transmitted to the market terminal for a long time. Therefore, the current 22 working day price adjustment period is more suitable for the status quo of China's refined oil market, and should not be adjusted.