18 May, 2018
China’s Commerce Ministry in early May granted five state-owned companies a total of 19.33 mil tons of oil product export quotas in the April-June period in the form of general trade. The volume was four times larger than the 4.79 mil tons (under the general and processed trade categories) for the same period a year earlier. A chart below shows that China’s oil product export quotas in the January to March period totaled 16.24 mil tons, compared with 13.00 mil tons in the same period the year earlier. China’s oil product export quotas in the first half of this year reached 35.57 mil tons, already accounting for 82.5% of the 43.12 mil tons in the whole last year. Oil product supplies in China are abundant. In addition, Yunnan Petrochemical started operations of its new 260,000 barrels per day (b/d) refinery in the second half of last year. China National Offshore Oil Corp (CNOOC) beefed up capacity of its 240,000b/d refinery including a crude distillation unit (CDU). Under the circumstances, those Chinese companies aim to raise exports of oil products. Meanwhile, regarding the export quotas approved by the government early this year, general trade accounted for most of the quotas while quotas for processed trade were limited to 3.76 mil tones. The Chinese government at the end of 2016 decided that refiners get refunds for value-added taxes under the general trade category, in a bid to promote general trade. Under the processed trade category, refiners are exempt from value-added and consumption taxes.