China issues final batch of refined fuel export quotas for 2020 - sources

By Chen Aizhu and Muyu Xu

SINGAPORE/BEIJING (Reuters) - China has issued a new and final batch of refined fuel export quotas for 2020 totalling 3 million tonnes, including its first sizeable quota to a giant private refiner, two industry officials with knowledge of the matter said on Monday.

The new issue brings the total fuel export quota this year to nearly 59 million tonnes, up from last year's 56 million tonnes.

Valid until the end of the year, the new quota includes 1.95 million tonnes allotted to CNPC, 1 million tonnes to privately controlled Zhejiang Petrochemical Corp (ZPC) and 50,000 tonnes to North Industries Group Corp(Norinco), the sources said.

The Ministry of Commerce did not immediately respond to a request for comment.

Rongsheng Petrochemical Co, the largest stake holder in ZPC, confirmed in a statement that it had received the 1 million tonne export quota.

ZPC, which operates China's single-largest crude oil refinery based in eastern port city Zhoushan, in July became the first private refiner allowed to export refined fuel, but the size of its quota had not been determined.

Beijing is seeking to let more private companies access the global fuel market as it looks to ease oversupply pressure on China's domestic market.

"The export quotas will offer more flexible choices for the company in the fuel market ... and will allow the company to pursue bigger benefits," Rongsheng said in the statement.

Previously, only a handful of large state-owned Chinese refiners, including Sinopec, CNPC, CNOOC, Sinochem Group and China National Aviation Fuel Co, have been allowed to export refined products.

Graphic: China's refined oil products exports: https://fingfx.thomsonreuters.com/gfx/ce/yxmvjeqgypr/fuel%20exports.jpg

Graphic: China fuel exports vs crude oil imports: https://fingfx.thomsonreuters.com/gfx/ce/ygdvzbjrzvw/ChinaFuelExportsNov2020.png

The allotment to Norinco will go to the group's subsidiary refinery, Huajin Petrochemical, based in northeast China's Liaoning province, which aims to use the quota for diesel exports, one of the officials said.

Despite swelling domestic fuel inventories as a result of record refinery processing, Chinese refiners have capped overseas shipments so far this year as the coronavirus pandemic slashed global demand.

China normally issues refined fuel quotas - covering mostly diesel, gasoline and jet fuel - in several batches over a year. Low-sulphur fuel oil exports come under a separate quota.

The latest batch falls under the "general trade" category, where companies receive a tax refund after transactions are completed.

(Reporting by Chen Aizhu in Singapore and Muyu Xu in Beijing; Editing by Sherry Jacob-Phillips and Richard Pullin)