【SCI View】Private Companies to Get Refined Oil Export Quota

SCI99

2019-12-24

China Private Companies to Get Refined Oil Export Quota

Big media in China all issued a piece of breaking news this week that China will create a fairer competition environment for private companies and support development of private companies. According to the planning of the State Council, private companies are encouraged to participate in oil and gas exploration, oil refining and petroleum product selling, and the private companies which comply with requirements will be awarded export quotas of gasoline, diesel and jet fuel.

China’s crude oil import dependence degree reached 72.01% in the first three quarters of 2019, and the crude oil import volume increased by 9.66% from the same period of 2018. It is predicted that China’s crude oil import volume will reach over 500 million mt in the whole year of 2019. Especially from 2015 when independent refineries were awarded crude oil import quotas, the imported crude oil took up a bigger and bigger proportion in independent refineries’ feedstock processing volume. This also pushed up China’s crude oil import volume.

SCI predicts that China’s crude oil refining capacity will reach around 950 million mt/a in 2020 and around 1,061 million mt/a in 2024. But on the demand side, although the growth rate of China’s vehicle parc will slow down, it is predicted that the vehicle parc will reach over 280 million in 2020. Therefore, China’s gasoline consumption volume will continue rising. But the diesel consumption volume will be restricted by the slowdown in economic growth rate and industrial structure optimization. SCI predicts that China’s diesel consumption volume will drop by 2.56% in 2020 from 2019. The jet fuel consumption volume will be supported by the rapid development of the civil aviation industry, and China’s jet fuel consumption volume is predicted to increase by 7.03% in 2020 from 2019. All in all, China will continue facing oversupply of refined oil in the next five years. Therefore, the export will still be an effective method to ease the oversupply of gasoline and diesel in China in the short run.

Meanwhile, private companies played a big role in increasing social employment opportunities, stimulating economic growth and promoting innovation in the past over 40 years. And now, China’s private companies, especially the independent refineries, are enjoying opportunities created by industrial evolutions in China.

........

Please click "Read more" for more information