China raises 1st batch of 2018 oil product export quotas by 30%

SINGAPORE (Reuters) — China raised refined products export quotas to its four state oil majors by 30 percent in the first batch of allowances for 2018, a document reviewed by Reuters showed on Thursday.

The notice did not include quotas for independent refiners, also known as "teapots," the second year the private refiners are being left out of the export scheme.

The state majors will receive total export quotas of 16.24 MMt under the general trade term for exporting gasoline, diesel and jet fuel, the Ministry of Commerce said in a notice.

Asia's largest refiner, Sinopec, has the biggest quota share at 6.74 MMt, followed by PetroChina at 5.75 MMt.

Sinochem and CNOOC will be allowed to export 2 MMt and 1.75 MMt of products, respectively.

CNOOC also got a separate allowance to export 70 Mt of LNG.

"The increase in quota showed oil majors are actively applying for more allowance to export," said a China-based trader who declined to be named.

"Due to weak domestic demand for gasoline and diesel, export margins are better than the domestic margin," the trader said.

The trader also said he expects the commerce ministry to issue separate export quotas for two refineries that will be started up by Dalian Hengli Petrochemical and Zhejiang Rongsheng Group next year.

China issued an allowance for 12.4 MMt in its first batch of export quotas in 2017.

Reporting by Florence Tan; Additional reporting by Meng Meng and Ryan Woo in BEIJING; Editing by Richard Pullin and Tom Hogue.

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