Shell has a retail network of 1

Shell China’s 200% owned subsidiary Shell (Zhejiang) Petroleum Trading has received a licence to trade refined oil products in China.

Awarded by China’s Ministry of Commerce, the licence will enable the company to independently trade oil products in the country’s domestic wholesale oil market.

The company can now expand its business beyond serving consumers at petrol stations.

Shell operates 1,300 retail stations in China through joint ventures (JVs) and sole proprietorships, according to S&P Global Platts.

Shell trading and supply global head Jacek Dziembaj said: “After obtaining the wholesale licence for oil products, we will be able to provide better trading services to our customers.”

Other major foreign enterprises to be granted such a licence include Exxon Mobil and Saudi Aramco through their joint venture with state-owned Sinopec, Reuters reported.

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Since opening up the wholesales fuel trading market to private companies in 2006, China has awarded product trading licences to more than 400 firms.

“After obtaining the wholesale licence for oil products, we will be able to provide better trading services to our customers.”

S&P Global Platts Asia analytics head Kang Wu said: “The wholesale business of refined products has long been dominated by Chinese national oil companies and is typically reserved for Chinese companies. The latest licence to a wholly owned foreign company is unique and set to increase the competitiveness of the wholesale market in China.”

However, the S&P Global report quoted an oil trader in South China as saying that the company would still have to purchase oil products from Chinese oil suppliers for trading in the domestic wholesale market as it does not have a licence to import oil products.

Shell has partnerships with major Chinese national oil firms such as China National Petroleum (CNPC), Sinopec, China National Offshore Oil (CNOOC) and Shaanxi Yanchang Group Company (YCG).

Last year, Beijing removed restrictions on foreign ownership in gas station JVs, as well as limit the number of retail stations foreign firms can operate in the country.

Following the policy change, Shell unveiled plans to increase the number of its gas stations in China to 3,500 by 2025.