China Allows Refiners to Export 40 Percent Less Fuel

China issued its latest batch of fuel export quota for the year, but total allowances are still around 40% less than the same point in 2021.

Some 5 million tons of diesel, gasoline and jet fuel quotas were awarded, according to refinery executives who received preliminary notices from the Ministry of Commerce and a note from local consultant OilChem. The executives asked not to be identified because they aren’t authorized to speak to media. 

The commerce ministry didn’t immediately reply to a fax seeking comment.  

That takes issuance in 2022 to 22.5 million tons, compared with 37 million tons for the same period last year. Beijing controls how much fuel both state-owned and private refiners can export, and has been seeking to limit shipments as part of efforts to reduce pollution and consolidate the sector.

A large chunk of China’s refining capacity is currently not being used as the economy recovers from virus lockdowns. The latest issuance shows Beijing isn’t interested in ramping up exports to meet surging demand from fuel-starved global markets. That’s in stark contrast to the US, where there’s a relative lack of capacity and refineries are running near their limits.

Based on the preliminary notices, PetroChina Co. received 1.47 million tons of quota and China Petroleum & Chemical Corp. got 1.27 million tons. Sinochem Group and Zhejiang Petrochemical Co. were assigned 840,000 tons each, while CNOOC Ltd. got 460,000 tons. NPI, an unit affiliated with Zhenhua Oil Co. obtained 100,000 tons and China Aviation Oil Corp. received 20,000 tons.

PetroChina, Cnooc, ZPC, CAO and Zhenhua Oil didn’t immediately respond to emails seeking comment. A Sinopec spokesman declined to comment.

Note: Volumes are in tons 

--With assistance from Serene Cheong.