China is inching closer to ending the state monopoly in the oil sector after it allowed a Xinjiang-based private energy firm to import crude oil, industry sources said on Wednesday.

Guanghui Energy Co Ltd, the largest private firm in Xinjiang, with a wide range of businesses covering energy, vehicles and real estate, has got the green light from the State Council, China's cabinet, to import crude oil, the China Business News reported on Tuesday quoting an unnamed company official.

The energy firm, which is the only non State-owned company in China with upstream oil and gas assets, is also seeking oil exploration rights to fully enhance its oil production chain.

A spokesman of the Xinjiang-based company, however, declined to comment on the issue.

Before 2011, China had been gradually increasing the amount of non-state imports to serve the few refineries that are not controlled by China's two State-owned refining giants.

China has fixed the 2014 crude oil import quota for non State-owned companies at 29.1 million metric tons. It also said that companies seeking crude licenses must have registered capital of at least 50 million RMB and access to crude receiving berths and storage facilities of at least 200,000 cubic meters.

Today about 30 non-State oil traders are qualified to apply for the crude oil quota, earlier reports said.