BEIJING, June 6 An alliance of more than 20 of
China's independent oil refineries has urged its members to
strictly adhere to government rules on oil quotas and taxes,
according to a group statement seen by Reuters on Tuesday.
The mostly privately run refineries, known as "teapots",
have upended China's oil market after Beijing began allowing
them to import crude in late 2015 in an effort to shake up a
market dominated by state-owned majors.
However, state firms like Sinopec and PetroChina
have repeatedly accused the independents of
undercutting their larger rivals by evading or under-paying
consumption taxes for gasoline and diesel. Beijing in 2016
dispatched inspection teams to oversee the teapots' tax records.
The indepedents are also facing shifting government policies
on oil quotas at a time when domestic oil demand growth is
slowing, undermining their ability to expand after a stellar
year in 2016.
"(We) shall strictly abide by government regulations over
flows of crude oil, pay taxes according to the law," the
statement from the alliance said.
"Resale of (imported) crude oil shall be strictly prohibited
... defaults shall be banned."
The government has stipulated that crude brought in via
import quotas should only used by the independents for their own
processing and not resold in the market.
The alliance, headed by Shandong Dongming Petrochemical
Group, the country's largest independent refiner, also called
for joint purchasing and information sharing in a bid to stave
off internal competition.
Since late 2015, China has allowed about 28 independent
companies to import crude oil for the first time in an effort to
to boost private investment and encourage competition.
The plants have won crude oil import quotas totalling nearly
1.9 million barrels per day, and made imports equal to about 18
percent of China's total oil imports in the first quarter.
(Reporting by Chen Aizhu; Editing by Richard Pullin)