How China manages refined fuel exports | The Business Standard
Skip to main content
  • Home
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Food
    • Habitat
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wheels
  • Epaper
    • GOVT. Ad
  • More
    • Subscribe
    • Videos
    • TBS Graduates
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Long Read
    • Interviews
    • Offbeat
    • Tech
    • Magazine
  • বাংলা
The Business Standard

Wednesday
December 06, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Food
    • Habitat
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wheels
  • Epaper
    • GOVT. Ad
  • More
    • Subscribe
    • Videos
    • TBS Graduates
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Long Read
    • Interviews
    • Offbeat
    • Tech
    • Magazine
  • বাংলা
WEDNESDAY, DECEMBER 06, 2023
How China manages refined fuel exports

China

Reuters
15 August, 2022, 02:40 pm
Last modified: 15 August, 2022, 02:43 pm

Related News

  • UNHCR welcomes China’s support for Rohingya refugee women in Bangladesh
  • Entrepreneurs eye export potential of steel, iron products
  • China's military: US Navy ship 'illegally' entered territorial waters
  • External trade through Islamic banks in decline
  • Chinese Embassy donates smart classroom in Sylhet

How China manages refined fuel exports

Reuters
15 August, 2022, 02:40 pm
Last modified: 15 August, 2022, 02:43 pm
Workers are seen near pumpjacks at a China National Petroleum Corp (CNPC) oil field in Bayingol, Xinjiang Uighur Autonomous Region, China August 7, 2019. REUTERS/Stringer
Workers are seen near pumpjacks at a China National Petroleum Corp (CNPC) oil field in Bayingol, Xinjiang Uighur Autonomous Region, China August 7, 2019. REUTERS/Stringer

China's refined fuel exports are likely to sink in 2022 to the lowest in seven years as the country seeks to maintain ample domestic supplies while refinery output posts a rare decline.

Regional rivals like India and South Korea are the probable primary beneficiaries of China's export cuts, which allow them to step up to fill shortages in Europe and elsewhere after the Ukraine crisis strained global fuel markets. 

How does China's quota system work?

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Beijing manages exports of gasoline, diesel and jet fuel under a quota system, issuing several batches of allocations over a year and viewing product shipments to global markets as a tool to manage domestic supply and demand balances.

Most quotas go to state oil groups, including China National Petroleum Corp, China Petrochemical Corp, China National Offshore Oil Corp, Sinochem Holdings and China National Aviation Fuel Company. Mega refiner Zhejiang Petrochemical Corp is the only private company with export allowances.

Through 2019 the government specified quotas by product, but since then it has allowed exporters to decide what to export from a general allocation.

Exports of very low sulphur fuel oil, a marine fuel that meets International Maritime Organisation standards, are managed under a separate quota system. Bunker fuel volumes from bonded zones - which are considered as exports - have been rising since 2020 as China works to build its eastern port of Zhoushan into a regional shipping fuel hub that rivals Singapore.

When and why did China start to cut quotas?

China's exports of diesel, gasoline and jet fuel peaked in 2019 at 55.4 million tonnes, with diesel accounting for nearly 40% of the total, according to Chinese customs data.

Total exports started trending lower from 2020 as the Covid-19 pandemic hit global fuel demand.

Beijing began adjusting its fuel export policy from late 2021, roughly reducing quota volumes by 40% so far in 2022. 

The sharp reduction in exports was triggered by Beijing's concern over a domestic supply crunch similar to that for thermal coal which led to widespread power cuts. 

The government is also keen to remove small, inefficient refining capacities to cut pollution and carbon emissions, and that has fed into China's lower throughput this year so far.

China's July refinery runs fell to their lowest in more than two years, data showed on Monday, with year-to-date volumes down 6.3% from a year earlier. 

What's the market expectation for 2022 quotas?

China has so far issued 22.5 million tonnes of quotas for the three main fuel products for this year, 40% below the corresponding period of 2021.

The second and third batches of quotas came only in June and July after refiners lobbied Beijing to help ease brimming domestic stocks amid Covid-19 disruption to fuel consumption. 

That left China largely missing out on a bumper export market in the second quarter when Asian refining margins for diesel and gasoline hit record highs around $72 and $38 a barrel, respectively. 

Domestic demand for diesel is set to rebound in September and October as China's harvest gets started and construction activities pick up, while a tax probe into independent refiners is expected to limit production of exportable fuel supplies during the rest of 2022. 
 

Global Economy

China / fuel / export

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • EC publishes full list of 96 local election observers with 29 new names
    EC publishes full list of 96 local election observers with 29 new names
  • Illustration: TBS
    Bangladesh Bank doubles limit for sending remittances through MFS
  • File photo of Election Commissioner Mohammad Alamgir. Photo: Collected
    Foreigners have not put pressure on Election Commission over polls: EC Alamgir

MOST VIEWED

  • This file photo from December 2019 shows a rider driving his motorcycle through cold wind and fog. A scene not yet visible this year. Photo: Mumit M
    Woe for seasonal crops, vegetables as winter comes late 
  • Caption: Illustration: TBS
    Source tax on land registration cut again
  • File Photo: Reuters
    $1.08 billion could be added to Bangladesh's dwindling forex reserves
  • Photo: Courtesy
    Woman entrepreneur Sangeeta Khan dies at age 62
  • 59 DSE stocks face downgrade to junk category
    59 DSE stocks face downgrade to junk category
  • Dollar pressure rises as short-term foreign debt drops $300m in October
    Dollar pressure rises as short-term foreign debt drops $300m in October

Related News

  • UNHCR welcomes China’s support for Rohingya refugee women in Bangladesh
  • Entrepreneurs eye export potential of steel, iron products
  • China's military: US Navy ship 'illegally' entered territorial waters
  • External trade through Islamic banks in decline
  • Chinese Embassy donates smart classroom in Sylhet

Features

Photo: Rexy Jason Gomez

A big love for the small wheels

3h | Features
Dhaka’s FDC,  Japan Garden City and Shia Masjid were all part of Gudaraghat once. PHOTOS:  Syed Zakir Hossain

What the remaining Gudaraghats remind us of Dhaka's long-lost water bodies

11h | Panorama
A trove of research underscores the perilous consequences of relying on plastic utensils, a narrative mirrored by the western world's pivot towards sustainable alternatives - ceramic, brass, or clay dinnerware. PHOTO: TBS

While we lose our sustainable traditions, the West pivots in the opposite direction

10h | Panorama
Ghulam Ali

Ghulam Ali: Voice that makes ghazals bloom

1d | Features

More Videos from TBS

What is 'obstructing the field' out?

What is 'obstructing the field' out?

2h | TBS SPORTS
When Farooki is hero

When Farooki is hero

1h | TBS Entertainment
Most Ukrainians are losing interest in going to war

Most Ukrainians are losing interest in going to war

4h | TBS World
Putin to visit UAE and Saudi Arabia

Putin to visit UAE and Saudi Arabia

6h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net