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China’s Jan-Feb diesel exports up tenfold from prior year

Tuesday, 21 March 2023 | 01:00

China exported 20% more gasoline and over 10 times more diesel in January and February than a year earlier, customs data showed on Saturday, after Beijing raised fuel export quotas to spur refinery output.

China’s diesel shipments in the first two months of 2023 surged to 4.54 million tonnes from a low base of 420,000 tonnes in the corresponding period last year, data from the General Administration of Customs showed.

The country’s diesel exports have totalled more than 2 million tonnes a month since November. Gasoline exports of 2.27 million tonnes were up from 1.89 million last year.

China’s gasoline exports have held at or above 1 million tonnes a month since October, when new export quotas came into effect. Jet fuel exports rose to 2.75 million tonnes, up dramatically from 1.23 million tonnes in the same period last year. China’s jet fuel exports have exceeded 1 million tonnes per month since September.

However, month-on-month data showed that exports of all three fuels slipped versus December’s bumper figures, when refiners rushed to fully utilise their expanded quotas.

Beijing issued 18.99 million tonnes of export quotas for refined fuel in the first batch of its 2023 allocation, up 46% from the corresponding 2022 allotment, as it aimed to ramp up refinery output and hoped to capture stronger export margins.

Higher gasoline exports reflected generous export quotas for the first quarter and export margins that were better than the year before.

China-based energy consultancy JLC estimated that January’s export margins on gasoline, while still negative, were 572 yuan ($8.30) per tonne higher than the same period last year.

Export margins for diesel were also higher than the year before, encouraging refiners to sell overseas. A broader slowdown in the property sector has depressed domestic demand for diesel, used as truck fuel in the agricultural and construction sectors, helping to prop up export sales, according to consultancies Wood Mackenzie, Longzhong and JLC.

A recovery in Asian air travel, stimulated by the end of COVID-related travel restrictions, has significantly increased demand for kerosene from bonded aviation fuel bunkers.

While China’s domestic air travel market has picked up, the resumption of international flights has also pushed up demand for refuelling airplanes at Chinese airports.

Such fuel sales are counted as exports. Customs data also showed that China’s imports of liquefied natural gas (LNG) in January and February fell 11.9% to 11.12 million tonnes, down from 12.68 million tonnes a year earlier.
Source: Reuters (Reporting by Andrew Hayley, Brenda Goh and Bian Jing; Editing by Sonali Paul and Jacqueline Wong)

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