China has issued 4.5 million tonnes of export quotas for refined fuel, an increase to the first issue for 2022 in order to ease domestic inventories after the COVID-19 lockdown hit demand, Reuters reported.
This will bring the total refined fuel export quotas to 17.5 million tonnes this year, still significantly less than the 29.5 million tonnes allotted under the first issue of 2021.
The new quotas have been awarded to China National Petroleum Corp, China Petroleum & Chemical Corp (Sinopec), China National Offshore Oil Corp and Sinochem Holdings, the sources said.
General trade quotas will be 3.5 million tonnes, and tolling quotas will be 1 million tonnes.
By slashing export quotas, Beijing wants to discourage refiners from pumping surplus fuel, a move that could derail its long-term emission fight.
As a result of the widespread COVID-19 lockdown, which began in March across various Chinese cities, Chinese fuel consumption has slumped, forcing refiners to scale back production amid a swollen inventory.
Transport fuels such as diesel, gasoline and aviation fuel are covered by these quotas. For very low sulfur fuel oil (VLSFO), which is used as marine bunker fuel, China issues separate export quotas.