China has issued a new batch of oil product export quotas and they are 5.3 percent higher than they were this time last year as the country's refineries return to processing record-high amounts of crude oil.
S&P Global Platts reports the total amount of the quotas is 23.79 million tons under the general trade route. Added to the oil product export quotas under the processing route, the total that Chinese refiners can export comes in at 45.29 million tons since the beginning of the year. That's up from 43 million tons a year ago.
Of the total, the biggest share is for gasoline, at 9.09 million tons. Next is gasoil with quotas for 9.175 million tons, and last is jet fuel, the export quota for which is 5.525 million tons, all under the general trade route that covers CNPC, Sinopec, CNOOC, Sinochem, and China National Aviation Fuel.
Now Beijing is due to issue the second batch of 2019 oil product export quotas under the processing trade route, which allows refiners exporting fuels to not pay taxes on the exported goods. The first batch of the quotas under this route amounted to 3.14 million tons and the first batch of general trade route quotas totaled 18.36 million tons.
Earlier this week, Chinese government data showed refiners were processing crude oil at the rate of 12.68 million bpd as of the end of April, up 5 percent from a year ago and a record high. According to a January report by CNPC, 12.68 million bpd was to be the average processing rate in China this year.
There has been mounting concern among refiners in other Asian countries that surplus fuel production in China would spill into neighboring countries, undermining the profit margins of local refiners. The increase in export quotas, however, suggests this is not a concern shared by Beijing.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More