China Friday granted fuel product wholesale licenses to two ventures owned by Sinopec Corp and its foreign partners - the first time foreign firms can tap into the market.

A wholesale permit for refined oil products like gasoline and diesel has been given to Sinopec SenMei (Fujian) Petroleum Co and Fujian Refining & Petrochemical Co, the Ministry of Commerce said Friday. Sinopec SenMei also received a license to store fuel products.

Hebei Province-based Langfang Rongli Petroleum Storage Co was also awarded a wholesale license Friday.

Under its World Trade Organization obligations, China has been gradually opening its highly regulated oil market.

The government announced rules late last year regulating the wholesale market as it started to relax the sector, allowing participation of foreign and domestic private firms providing they meet certain requirements in capital and capacity.

But the wholesale sector is still expected to remain in tight control of Sinopec and PetroChina Co for some time, because of the dominance of the two state-owned companies in oil imports and the domestic refining market, analysts say.

18 approvals

This may be reflected by the situation in the oil retail market, which was opened to foreign companies in late 2004.

So far, 18 foreign or Sino-foreign firms have been approved to carry out fuel retail businesses in China, with 2,607 pump stations, or 2.8 percent of the country's total, according to the commerce ministry.

"Foreign firms have entered into the retail segment, but we don't see too much presence," Chen Haoran, chairman of China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters, said. "Foreign presence will grow in China's oil market but so far the picture hasn't been largely changed."

Sinopec SenMei, a service station venture, and Fujian Refining, a petrochemical venture, are two Sino-foreign ventures worth a total of US$5 billion in southeastern Fujian announced by top Asian refiner Sinopec and Saudi Aramco and US giant ExxonMobil Corp in March. They became the first Sino-foreign integrated refining-petrochemical-fuel marketing project in China, after 12 years of talks.

China National Offshore Oil Corp, the smallest of China's three state oil companies, received a fuel wholesale license last month.