Wednesday, June 19, 2024

China Issues Second Batch Fuel Export Quotas

May 11, 2020

© Igor Groshev / Adobe Stock

China has issued 28 million tonnes of refined fuel export quotas in the second allotment for this year, little changed from the first batch of 27.99 million tonnes issued last December, according to four sources with knowledge of the matter.

The quotas were released last week to five state oil companies, PetroChina (PCCYF), Sinopec, China National Offshore Oil Corp, Sinochem Group and China National Aviation Fuel Corp, the sources said.

The new quotas, of mostly gasoline, diesel and aviation fuel, come as domestic fuel consumption is recovering from a plunge in demand caused by the novel coronavirus, while the Asian market is awash with unwanted transportation fuels.

Still, no private refiner was granted quotas, despite Beijing's pledge last December to give wider market access to the private sector.

Beijing normally issues three or more batches of quotas during a year. A total of 56 million tonnes were issued for 2019.

The new issue consists of 24.6 million tonnes under the general trade category and 3.4 million tonnes under the tolling system.

Companies receive a tax refund for general trade transactions once exports are completed, while taxes are waived under tolling arrangements.

China's exports of gasoline jumped 21% in the first quarter from a year earlier, while that of aviation fuel rose 6%, as refineries scrambled to increase sales to overseas markets amid tepid domestic demand due to coronavirus-led disruptions to transport and industry.

Separately, China has issued its first-ever export quotas for very low sulfur fuel oil totalling 10 million tonnes, including an allotment to a private refiner for the first time ever, to capture a transforming shipping fuel market under a new global emission rule.

(Reporting by Chen Aizhu in Singapore and Muyu Xu in Beijing; Editing by Kim Coghill, Aditya Soni)

Related News