Analysts say the decision to resume fuel oil futures signals that China has taken an important step to deregulate its oil sector
China Securities Regulatory Commission, China's national regulator of securities and futures, has approved the application of the Shanghai Futures Exchange to trade fuel oil futures following the consent of the State Council.
The trading could be jump-started "at an appropriate time after the exchange completes various preparations."
The commission said the move was taken to allow the futures market to play a role in hedging price fluctuations and risk control in accordance with the decisions issued in February by the State Council on promoting the reform and opening up of its capital markets.
China's consumption of fuel oil totals 44 million tons, including 23 million tons of imported oil.
China opened the fuel oil futures exchanges in 1993 in Shanghai, Nanjing and Beijing, trading fuel oil and other products. But they were closed two years later as part of an industrial overhaul.
Big oil users, such as airlines, and some economists have been calling for the resumption of these futures to hedge price fluctuations in the international market. As a major oil consumer and importer, China needs its own oil futures market to enhance its impact on international prices.
Analysts say the decision to resume fuel oil futures signals that China has taken an important step to deregulate its oil sector.
During its bid to join the World Trade Organization, China agreed to open its retail refined oil sector in December.