Oil Report

UPDATE 1-China issues first of 2020 fuel import quotas, mostly naphtha

(Adds other fuel products; breakdowns for naphtha)

SINGAPORE, Dec 31 (Reuters) - China issued its first batch of refined fuel import quotas for 2020, with most of the quotas for naphtha shipments, according to a document from the Ministry of Commerce reviewed by Reuters on Tuesday.

Companies will be allowed to import 9.08 million tonnes of oil products, with 7.87 million tonnes allocated to naphtha imports, the document showed.

State-owned refiners Sinopec Corp <0386,HK>, PetroChina , China National Offshore Oil Co and Sinochem Corp were allocated naphtha import quotas of 4.45 million tonnes.

Four independent petrochemical companies, Zhuhai Changlian, Qingdao Lidong, Dalian Fujia and Ningbo Zhongjin, were granted a total of 3.42 million tonnes, the documents showed.

The quotas also allocated permits for 320,000 tonnes of gasoline, 480,000 tonnes of diesel and 200,000 tonnes of vacuum gas oil, all of which will go to the four state oil firms.

China National Aviation Fuel Co was also granted quotas for 10,000 tonnes of aviation gasoline and 200,000 tonnes of jet fuel.

In 2018, China imported 7.47 million tonnes of naphtha and imports in the first 11 months of this year were 6.5 million tonnes, according to Chinese customs data.

China became a net naphtha importer a decade ago and is now one of the top four naphtha importers in Asia, behind South Korea, Japan and Taiwan.

Asia is structurally short of naphtha and relies heavily on the Middle East for the bulk of its supplies, used in the region’s vast petrochemical industry, along with supplies from Europe and the Mediterranean.

Reporting by Chen Aizhu; Additional reporting by Seng Li Peng in Singapore and Jane Chung in Seoul; Editing by Tom Hogue and Christian Schmollinger