SINGAPORE: China has issued 19 million metric tons of export quotas for gasoline, diesel and aviation fuel under the first batch of allowances for 2025, steady versus a year earlier, several traders and a Chinese industry consultancy said on Wednesday.
China manages its refined oil exports via a strict quota system, using exports as a tool to balance and ensure the domestic market is sufficiently supplied.
State-owned oil firms Sinopec and CNPC, the key receivers of these quotas, were given combined allowances of 13.34 million tons, or 70% of the 19 million tons, according to traders and consultancy JLC.
Private refiner Zhejiang Petrochemical Corp was awarded 1.67 million tons of export quotas in this batch, they added.
China’s commerce ministry did not respond to a faxed query for comment from Reuters.
Separately, China has also released 8 million tons of low-sulfur marine fuel export quotas for the first issue of 2025, also flat compared with a year ago, traders and JLC said. Of the total, around 90% were allotted to Sinopec and CNPC.
For the first 11 months of 2024, China’s exports of refined oil products - including mostly gasoline, diesel, aviation fuel and marine bunker - totalled 54.4 million tons, down 6.3% from the corresponding period of 2023.
We expect “exports of all three products to average lower year on year in next year’s first quarter as refiners readjust their operations”, said consultancy FGE’s head of China oil analysis Mia Geng.
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Processing trade export quotas totalled 5.95 million tons, taking up 31% of the total allotted volumes for this first batch, while general trade took up the majority.
Under the so-called processing trade export route, refiners are exempted from import taxes on crude oil and export taxes for oil products, but have fixed volumes and time slots to export, both under the tight scrutiny of Chinese customs.
China’s oil consumption is expected to peak in 2027 at no more than 800 million tons, or the equivalent of 16 million barrels per day of crude oil, according to refining major Sinopec.
Diesel demand is slowly being replaced by rising use of liquefied natural gas in the past few years, while gasoline demand is being eroded by the higher usage of electric vehicles in the country.
January sales from refiners such as CNOOC and Sinochem started for jet fuel and 10ppm sulphur gasoil two weeks ago, three trade sources said.
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