Private Chinese refiner Zhejiang Petroleum & Chemical Co (ZPC) has received the country’s first-ever license to a private company to export refined oil products out of China, Reuters reported on Thursday, quoting sources familiar with the plan.
The Chinese government, however, has yet to set the quota of how much refined oil products ZPC can export and directly sell on the international market, according to Reuters’ sources.
So far, only the big state-controlled oil majors in China, such as Sinopec, Sinochem, China National Petroleum Corporation (CNPC), and China National Offshore Oil Corporation (CNOOC), have been allowed to directly export refined petroleum products.
Zhejiang Petroleum & Chemical will likely remain the only private Chinese refiner with a license to export fuel because it is based in a free trade zone, according to Wang Zhao, an oil analyst with China-based Sublime Information, who spoke to Reuters.
In May this year, China issued the second batch of its fuel export quotas, and all went to state-held refiners. Sinopec, CNOOC, PetroChina, Sinochem Group, and China National Aviation Fuel Corp received quotas to export refined oil products, sources told Reuters at the time.
Increased exports of fuel from China could keep refining margins across Asia depressed, industry consultancy FGE told Bloomberg at the end of June.
Preliminary data from analysts showed that China’s gasoline exports, for example, surged in the third week of June. FGE expects Chinese exports of gasoline to double to 400,000 bpd-500,000 bpd this month and next from an estimated 200,000 bpd-300,000 bpd in May and June.
In May, China’s gasoline exports slumped by 64.2 percent month on month to their lowest level since February 2019, due to weak refining margins, according to data from the General Administration of Customs cited by Reuters. Total fuel exports out of China more than halved in May, the data showed.
By Tsvetana Paraskova for Oilprice.com
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