Chinese authorities have granted 11 percent lower crude import quotas to independent refiners in the world's top oil importer in the first batch of quota allowances for 2022.
The government, intent on reforming the independent refining sector and cracking down on tax evasion and illicit practices at the teapots, is now allowing its independent refiners to import 109 million tons of crude oil in the first batch for 2022. This is down by 11 percent compared to the first batch of quotas granted for 2021, officials from some of the 42 private refiners that were granted import quotas told Bloomberg on Thursday.
The three biggest private refiners in China - Zhejiang Petrochemical, Hengli Petrochemical, and Shenghong Petrochemical - together accounted for around 38 percent of all first-batch import allowances, a document seen by Reuters showed. This suggests that China is now favoring giving quotas to the newer and more sophisticated private refineries as it cracks down on smaller and more polluting independent refiners, some of which are being investigated over alleged irregular tax and trade practices.
The first-batch allowances this year includes fewer private refiners - 42 compared to 56 last year, and some of the biggest so-called teapots in the Shandong province did not receive any crude import allowances at all, according to Bloomberg.
A combination of China's policies to curb pollution in time for the Winter Olympics in Beijing in February, its crackdown on illegal practices at independent refiners, and its zero-COVID policy with intermittent lockdowns are set to slow crude oil imports at the world's top oil-importing nation early next year, industry consultants told Bloomberg earlier in December.
Chinese imports in March 2022 are set to be around 10.7 million barrels per day (bpd). This would be about 1 million bpd lower than the crude oil imports in March this year, according to estimates from consultants FGE cited by Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More