Study On The Administrative Monopoly Of China Oil Industry

The oil industry is one of the basic industries of national economy, and has important economic status and strategic position. Therefore, since the oil industry development, world oil industry conducted a series of state monopoly and control. But, then, because of the efficiency reason, most countries conducted different reforms, leading to the condition that there are many different monopoly and regulation situations in oil industry, and performance is very different.Our country had established our oil industry by central planned big group battles style after the foundation of our PRC, then, oil industry have been managed under high planned economy, until the establish of CNOOC at 1982. Then, in 1998, China oil industry made a big restructuring. After two important reorganizations in 1982 and 1998, China oil industry had formed the organization of oligopoly that CNPC, Sinopec and CNOOC three group companies occupy north, south, partition offshore oil drilling process. In about 2000, the three oil companies listed (Shanghai, Hong Kong and New York), thus the 3 companies oligopoly of China's oil industry established. Planned economy legacy of monopoly situation and the still serious central management in institution, structure and behavior constitute the oil industry's administrative monopoly.China's oil industry faces many problems, such as, low production efficiency, the often refined oil shortages, high oil prices, corporate redundant, super large internal longitudinal income gap, high income, excessive monopoly profits, lack of international competitiveness of enterprises, etc. These problems are mainly caused by the administrative monopoly. Though there are many controversies on the reasonableness of administrative monopoly and the existence or not of it in the theory and practice areas, but, there is little system study on china oil industry's administrative monopoly. Based on the system study on the administrative monopoly in China's oil industry, this paper, ultimately make our own conclusions.To the administrative monopoly in China's oil industry, the domestic study is now generally stays on the perceptions. This analytical framework based on indicators of ISCP way to a comprehensive and systematic understanding of the administrative monopoly status of the oil industry. The oil industry can be divided into five specific areas:the upper stream exploration and mining sectors, crude oil wholesale segment, midstream refining sectors, downstream refined oil wholesale and retail, transportation of crude oil and refined oil sectors. The second and four segments are little impacting, so generally ignored, the other three sectors have different levels of administrative monopoly, so calculated, respectively, and then come to my final summary of the overall administrative monopoly of the oil industry, the degree of 81.17%. (Using the same index system, the measured administrative monopoly extent number of railway, telecommunications, electricity, are 87.8%,78.4% and 72.9%).There is its special reason for maintain of China oil industry's such high degree of administrative monopoly. The reason for its monopoly, on the surface, is similar to the salt, of strategic importance and livelihood of oil, in fact, the real reason lies in the high profits, the need to compete with foreign enterprises, foreign investment needs big company, high R & D input in mining, oil refining technology, oil quality control, etc. And the abundant funds leading by the administrative monopoly in oil industry, is the maintain motivation and provide the ability to maintain. These variables may constitute a formation and maintenance model of oil industry administrative monopoly.China oil industry's administrative monopoly had influnced efficiency greatly. The price regulation leading to that domestic petroleum price cannot reflect the domestic demand and supply and then lead to oil shortage or high prices; the administrative oligopoly in refining market leading to X in-efficient; close relationship between government and Chinese oil companies create business goals deviate from profit maximization; administrative interference and the traditional planned economy remains make enterprises have reason to cause low efficiency. There are many ways to measure the efficiency, the index system and the DEA method is two very commonly used methods. In this paper, an index system based on ISCP method, measured out a 1992-2008 three links state in the efficiency of the oil industry, and then using DEA and malquist method calculates the 92-08 years the efficiency of China's petroleum industry situation and the evolution of the overall trend, finally, the efficiency of domestic and international oil industry conditions were compared. Found that China's oil industry is indeed inefficient, but in some areas, reform had a very big effect. To the relationship between the efficiency of administrative monopoly in china's oil industry is also a highly contentious issue. By comparing the relationships in different industries of china, in different historical periods of China's oil industry, in different countries, the final conclusion is derived: the administration of oil industry leading a great efficiency loss. In order to put forward science proposals for reform of administrative monopoly, this paper, uses the cost-benefit analysis, to the oil industry produced through in-depth internal links, the more accurate calculation of the final draw of oil industry in 2000-2007 resulted in the loss of administrative monopoly as a combined 3.9 trillion Yuan. Using cost-benefit comparison we can find cost (loss) is far greater than the benefits, through the analysis of impact factors of cost-benefit, we can find that oil price regulation is one of the main reasons causing significant damage.The general trend in world oil industry is to expand competition and deregulation, our country also does light deregulations, but for relaxation to what extent, on private and foreign investment, attitude towards the liberalization of prices and oil flows, there is endless public debate. According to the status of each link, through cost-benefit analysis presented in the system, this paper proposes systematic reform ideas in institution, structure, behavior, and regulatory agencies.