Oil Company Calls for Law to Regulate Gas-station Franchising

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Last updated at: (Beijing Time) Monday, July 29, 2002

Oil Company Calls for Law to Regulate Gas-station Franchising

Relevant laws should be initiated in China to govern the country's gas-station franchising industry as soon as possible, a senior official with PetroChina, China's leading oil company, said Monday.

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Relevant laws should be initiated in China to govern the country's gas-station franchising industry as soon as possible, a senior official with PetroChina, China's leading oil company, said Monday.

In an interview with Xinhua, Lin Qingshan, PetroChina's vice-president in charge of refining and product sales, said that the absence of the relevant laws was hindering the development of gas station franchising.

Commonsense dictated that a gas station should tow PetroChina'sline if it signed a franchising contract and joined PetroChina's gas station network, Lin said, but in reality, contract breakers were rarely punished due to the lack of legislative support.

"As it stands, gas stations can source sub-standard gasoline without worrying about legal punishment. That hurts not only PetroChina's image, but also the security of society," Lin said.

PetroChina has about 2,000 franchised gas stations, whereas rival Sinopec has 4,000. The so-called "social gas stations", those independent of PetroChina and Sinopec, still account for around 50 percent of the national total.

Claiming some social gas stations were undermining economic order, the Chinese government in February launched a campaign to streamline the country's gas station network, mainly by franchising social gas stations to PetroChina and Sinopec.

But Lin concluded, "Without the support of legislation, such franchising activity can go nowhere."

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