China committed to letting foreigners into its oil market as part of its accession to the World Trade Organization in 2001. The retail business was opened at the end of 2004, allowing foreign companies to run a small number of service stations on their own or to operate larger networks with Chinese partners.

French oil giant Total agreed to invest US$220 million in its joint venture with Sinochem Corp, a State-owned oil-trading company, to build a 200-station network in northern China and a 300-station network in and around Shanghai.

BP has set up a joint venture with Sinopec to have 500 petrol stations built in Zhejiang Province, while another joint venture with PetroChina will run another 500 outlets in South China's Guangdong Province.

Royal Dutch Shell said earlier it planned to add more than 200 stations in East China's Jiangsu Province through its joint venture with Sinopec over the next six months. Shell has an agreement with Sinopec to build 500 sites in Jiangsu. Of those, 200 have been established.

But the foreign competitors cannot shake the dominance of PetroChina and Sinopec. The two companies now have more than 50 per cent of the retail market, and 90 per cent of the wholesale market.

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