Shanghai is considering a regional law to fight the production and sale of gutter oil, or illegally recycled cooking oil, the city's food safety watchdog said on Friday.

The regulation, which would be the first of its kind to be promulgated by a city, would require an accurate report of the waste oil produced, and it would only be able to be used as a source of energy such as biodiesel.

The move would help tackle the problem at its source, said Yan Zuqiang, director of the Shanghai Municipal Food Safety Commission Office.

The city is also considering material incentives to encourage food companies to hand in their waste cooking oil, which will further prevent it from being recycled and returning to dining tables.

"The overall situation (of fighting gutter oil) is improving and the issue is well under control," Yan said.

He said that official tests show that more than 99 percent of edible oil in Shanghai is qualified for use.

In the city's efforts to combat the use of gutter oil, around 31,500 restaurants, 202 food producers and 251 food retailers had been brought under the waste oil reporting system by the end of 2012.

A total of 23,000 metric tons of waste cooking oil were properly treated in 2012, an increase of 63 percent year-on-year.

In 2012, inspectors also handled more than 400 gutter oil-related cases, seized 200 vehicles used to illegally collect the waste, and confiscated 200 tons of substandard edible oil.

Meanwhile, more than 160 hideouts used for producing, harboring and transacting the gutter oil were busted.

- Wang Zhenghua