Singapore — China has awarded 3.14 million mt of export quotas for gasoline, gasoil and jet fuel for use under the processing trade route, a week after Beijing awarded 18.36 million mt of oil product quotas under the general trade route, market sources told S&P Global Platts Tuesday.
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Export quotas for jet fuel accounted for 92% of the allocations under processing trade, which was within expectations.
The export quotas under the trade route for jet fuel are normally used for sending barrels to bonded storage for fueling international flights, while those under the general trade route are for exports directly to overseas markets.
The latest allocation brings the total oil product export quota allocation in the first round of 2019 to 21.5 million mt, up 7.5% compared with the first round of 2018.
Export quotas for middle distillates -- gasoil and jet fuel -- rose 25.2% and 17.4% year on year to 8.9 million mt and 7.35 million mt, respectively.
Gasoline was the only product to see a decrease in its export quota allocation for 2019, falling 20.8% year on year to 5.25 million mt.
Sinopec saw the largest decline in gasoline quotas, down 46% at 700,000 mt, and the largest increase in gasoil quotas, up 36% year on year at 4.9 million mt.
China awards oil product export quotas to state-owned CNPC, Sinopec, CNOOC and Sinochem under the general and processing categories.
Under the general trade route, state refiners are free to export from the domestic market, irrespective of whether the feedstock is domestic or imported crude. Unused quotas can be rolled over to the following quarter, but not to the following year.
Under the processing trade route, refiners have less flexibility -- the feedstock must be imported crude and the products can only be sold to the party that supplied the crude feedstock, although the products can be resold again.
--Oceana Zhou, firstname.lastname@example.org
--Edited by Jonathan Fox, email@example.com