Lack of Beijing “Consensus” May Result in Energy Super-Ministry

China is considering a proposal to create an energy “super-ministry” as part of a sweeping cabinet reshuffle in 2013, according to Reuters.

A veteran official with the state-owned China National Petroleum Corp (CNPC)said the energy super-ministry would focus on policy rather than detailed regulation.

The central government has been trying to draw up a long-term strategy on the security of overseas oil-and-gas supplies, rationalize pricing and taxation policies, boost nuclear and renewable energy sources, and cut carbon emissions. Beijing has struggled to achieve many of its priorities, including establishing a strategic petroleum reserve and reining in its chaotic coal industry, because of a lack of coordination between powerful ministries and state-owned enterprises. The lack of a single policy maker has also impaired China’s efforts to bolster energy security.

Wang Aochao, head of research at UOB Kay Hian in Shanghai, added, “Take overseas mergers and acquisitions, for example — the NDRC, the National Energy Administration, the Ministry of Commerce, SASAC and the Foreign Exchange Administration are all involved, making the M&A process very slow.”

The creation of the super-ministry would also devolve power from the National Development and Reform Commission (NDRC). The change would call for giving the new ministry the power to set oil, gas, coal and electricity prices, which the NDRC currently manages.