SINGAPORE – China has raised the volumes of its first batch of 2020 fuel export quotas by 53% from a year earlier to 27.99 million tonnes, according to a document from the Ministry of Commerce that was reviewed by Reuters on Tuesday.

China issues first 2020 fuel export quotas, up 53% from year ago

Source: Reuters

The new quotas will be shared among five state oil companies, PetroChina, Sinopec, China National Offshore Oil Corp, Sinochem Corp and China National Aviation Fuel Corp, according to the document.

The quota increases follow the addition of about 900,000 barrels per day of crude refining capacity in China this year that has caused a domestic fuel glut and spurred record exports.

In a departure from past quota announcements, the commerce ministry did not give a breakdown of exports by products, such as gasoline, diesel and jet kerosene, but instead will allow the companies to decide what products to export.

Beijing normally issues three or more batches of quotas during a year. The first batch issued for 2019 was 18.36 million tonnes, about a third of the annual total of 56 million tonnes eventually given. [nL3N1YX1EQ]

Sinopec, Asia’s biggest refiner, was granted the largest quota at 13.36 million tonnes, PetroChina received 9.2 million tonnes, CNOOC was given 2.58 million tonnes, Sinochem 2.79 million tonnes and China National Aviation Fuel 60,000 tonnes.

The first round of 2020 quotas will be split into 24.55 million tonnes under the general trade category and 3.44 million tonnes under tolling arrangements, the document showed.

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

In 2019, 48.15 million tonnes of quotas were given under the general trade category and 7.85 million tonnes under the tolling scheme, mostly for jet kerosene exports.

None of China’s private refiners were given export quotas in this first batch but company sources from Hengli have said the company is seeking to become the country’s first private jet fuel exporter.

China’s State Council, or cabinet, will allow qualified private companies to import crude oil and export oil products to widen market access in industries such as power, petroleum and telecommunications, state news agency Xinhua reported on Dec. 22, without saying when the change will occur.

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