Chinese oil refiners are increasingly anxious toward the end of the year as they wait for Beijing to allocate new crude oil import and oil product export quotas, Bloomberg reported. The import quotas are for private refiners, while the export allowances are for the entire industry, including state-owned companies. In the past years, both types of quota were typically announced before the year ended so refiners could arrange their export and import plans for the coming months in the subsequent year.
Some industry sources said the delay might result from tax probes, environmental inspections, heightened competition between independent and state-owned companies, the uncertainty caused by omicron, and China’s zero-tolerance approach in tackling COVID-19 outbreaks. The postponement came as the latest headwind for China’s refining industry which is already facing an economic slowdown and uncertainty from the new virus strain.
Officials at three private refiners said in the report that they had run out of crude and were struggling to start planning operations, financing, and hedging for 2022. These companies will have to pay demurrage fees for cargo they booked to be delivered early next year if the import quotas are pushed back until January. Many private refiners and traders have applied for fuel oil import quota for next year to cope with the delayed quotas for crude imports.
Tags: AlwaysFree,Asia Pacific,China,Crude Oil,English,NEAPublished on December 30, 2021 12:29 PM (GMT+8)
Last Updated on December 30, 2021 12:29 PM (GMT+8)