Eric Watkins
Senior Correspondent
LOS ANGELES, Mar. 11 -- China plans to establish a full cabinet-level regulatory body aimed at consolidating and overseeing all of the fuel-related responsibilities now assigned to differing agencies.
The new Commission, to be called the State Energy Commission, will be responsible for about 10 ministerial or subministerial agencies covering oil, gas, and other forms of energy such as the Energy Bureau of the National Development and Reform Commission, China National Petroleum Corp., and China Petrochemical Corp.
Conflicting interests and a lack of coordination among various ministries and commissions have made it difficult for the central government to regulate the sector from the perspective of national energy security.
"Such a body is urgently needed to oversee strategic oil reserves and overcome the country's shortages of energy," according to one industry source who said the change has come because of worries about energy security, especially as China's dependence on imported oil edges towards 50% and oil prices reach $100/bbl or more.
Nearly 60% of China's oil imports come from the Middle East, which makes the mainland vulnerable to any disturbance in international markets. But the government estimates that it will need to import 70% of its oil and 50% of its gas by 2020.
Contact Eric Watkins at [email protected].
