China awards first oil product export quotas for 2021

The Chinese government has issued its first batch of oil products export quotas for 2021, to six state-controlled firms — PetroChina, Sinopec, CNOOC, Sinochem, CNAF and Norinco's 120,000 b/d Huajin refinery, as well as private-sector Rongsheng's 800,000 b/d ZPC refinery.

The government awarded 29.5mn t of quotas in the latest batch, up by 1.51mn t or 5pc from the first batch in 2020. A breakdown by gasoline, diesel and jet fuel has not been announced.

The year-on-year growth mainly reflects the awards to ZPC and Huajin, which have been granted 2mn t and 150,000t respectively under general trade terms. These two firms have been added to the recipient list since the award of the third batch of quotas for 2020.

The quotas granted to the five other firms are down by 646,000t or 2pc on the year to 27.35mn t. State-controlled firms have struggled to use up their quotas and are likely to only run through 80pc of their allowances for 2020 because of poor export margins and weak demand from overseas.

The quotas cover both general trade and exports under third-party processing deals. The general trade quotas total 26.17mn t, 1.62mn t higher than a year earlier. PetroChina and CNOOC received 7pc and 14pc more quotas than last year respectively, while Sinopec, Sinochem and aviation fuel distributor CNAF received less. CNAF's jet fuel quota halved from a year earlier to 30,000t, amid a much slower recovery in aviation sector jet fuel demand compared to road fuels gasoline and diesel.

Quotas granted for third-party processing deals total 3.33mn t, lower by 110,000t or 3pc from the first batch this year. The quotas are shared among Sinopec, PetroChina and Sinochem, with 2.4mn t, 800,000t and 130,000t respectively. CNOOC was awarded 100,000t in last year's first batch but was not included in the latest list.