BEIJING (Reuters) - China’s state oil refiners have been granted a combined 1.315 million tonnes of quotas to export refined fuel under so-called general trade terms, three sources familiar with the matter said on Monday.
These permits, mostly for diesel and gasoline, were in addition to the 3.335 million tonnes of quotas allotted to the refiners under a separate, so-called processing trade category, after Beijing agreed to grant tax incentives to exports under general trade terms.
The general-trade quotas were issued in early March with PetroChina (0857.HK) receiving 1 million tonnes and Sinopec Corp 300,000 tonnes, said two of the three sources familiar with the companies’ quotas.
CNOOC, which holds less refining capacity, won a quota for 15,000 tonnes as an “experiment”, said the third source, who has direct knowledge of CNOOC’s trade operations.
These were the second batch of general trade quotas for 2017. In early 2017, PetroChina was the only refiner granted a quota for 600,000 tonnes, said one of the sources.
At the end of March, China also issued its second batch of quotas for 2017 under the prevailing processing, or tolling, rules, lowering the volumes by 73 percent compared to the first round.
State refiners applied for the general trade quotas after the government agreed in late 2016 to grant tax incentives on fuel exports making the terms more attractive since it offers refiners greater flexibility in the volumes and time frames for exporting fuel, said the three sources who are familiar with the rules.
Top Asian refiner Sinopec (0386.HK) said on Friday it exported a diesel cargo to Singapore under the general trade rules for the first time in 13 years.
PetroChina did not win any quotas under the recent round of processing trade quotas, Reuters has reported.
The sources said PetroChina, which imports less crude than rival Sinopec, did not apply for the processing trade quotas but only asked for general trade ones since it see those terms as more attractive.
State oil firms normally do not comment on operational matters.
Under the processing rules, refiners are exempted from import taxes on crude oil and export taxes for oil products, but have a fixed volume and time slots to export, both under the tight scrutiny of Chinese customs, Beijing-based oil traders have said.
Under the general trade category, refiners get tax refunds after exports are completed or get a tax waiver on fuel exports, a policy that Beijing granted in 2016, the three sources said.
Reporting by Chen Aizhu and Meng Meng in Beijing, Jessica Jaganathan in Singapore