Singapore — China's gasoline and gasoil exports climbed to multi-month highs in December amid oil companies' rush to use up product-export quotas by the year end.
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Gasoline exports climbed to a seven-month high of 1.28 million mt in December, more than double the 633,000 mt exported in November, preliminary data released by the General Administration of Customs showed Thursday.
The country's gasoline exports in 2018 rose 22% year on year to 12.88 million mt, leaving 400,000 mt of gasoline quotas unused for the year.
Beijing controls the country's oil product exports by quota. The unused quota expired by the end of 2018.
In end November, the Chinese Ministry of Commerce surprised the market by issuing an additional round of quotas, including 760,000 mt of gasoline and 1.13 million mt of gasoil.
"Oil companies are generally desperate to use up the quotas by year end, but the last allocation was too prompt, giving a very narrow time window for oil companies to adjust their export plans and logistic arrangements, " a Beijing-based analyst said.
Oil companies usually plan their exports a month ahead of the loading days.
Meanwhile, gasoil exports in December rose 39.1% on month to a four-month high of 1.57 million mt, but down 21.3% on year, GAC data showed.
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In January-December, the gasoil outflow increased by 7.4% to 18.53 million mt, leaving a 370,000 mt quota for the fuel unused.
The rise can also be attributed to weak domestic demand -- especially for gasoil -- in December, when the higher availability of export quotas made it possible for refineries to increase exports, market sources said.
The market expects the combination of sufficient quotas and weak domestic demand to further boost gasoline and gasoil exports in January.
China's National Bureau of Statistics on Monday said that the country's gross domestic product grew by 6.6% year on year in 2018, the slowest pace of growth seen since 1990. Economists expect the growth rate to fall further to 6.2% in 2019, which could limit domestic energy consumption.
Meanwhile, Beijing has issued a total 14.15 million mt of export quotas for gasoline and gasoil so far this year, up 2.98% year on year.
--Edited by Shashwat Pradhan, firstname.lastname@example.org