China issues new batch of fuel export quotas - sources

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Oil tankers are seen at a terminal of Sinopec Yaogang oil depot in Nantong, Jiangsu province, China June 11, 2019. REUTERS/Stringer/File Photo/File Photo

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SINGAPORE, June 7 (Reuters) - China has issued 4.5 million tonnes of quotas for refined fuel exports, sources told Reuters on Tuesday, a top-up to the first issue for 2022 to ease high domestic inventories as demand was dented by COVID-19 lockdowns.

The new issue will bring the total of refined fuel export quotas this year to 17.5 million tonnes, still significantly lower than the 29.5 million tonnes allotted under the first issue of 2021.

Four firms, including China National Petroleum Corp, China Petroleum & Chemical Corp (Sinopec), China National Offshore Oil Corp and Sinochem Holdings, have been granted the new quotas, the sources said.

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The quotas will be divided into general trade, at 3.5 million tonnes, and tolling, at 1 million tonnes.

Beijing wants to discourage refiners from pumping surplus fuel, an act seen by the government as derailing its long-term emission battle, by slashing quotas for export.

But the widespread COVID-19 lockdown, starting in March across several Chinese cities, has hammered Chinese fuel consumption and forced refiners to scale back production amid swelling product inventory.

These quotas cover mainly transportation fuels diesel, gasoline and aviation fuel. China separately issues export quotas for very low sulphur fuel oil (VLSFO), used as marine bunker fuel.

The ministry of commerce, which is responsible for quota releases, did not immediately respond to a request for comment.

Below lists the details of 2022 fuel quota issues, excluding VLSFO, with volume in million tonnes.

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Reporting by Muyu Xu, Florence Tan and Chen Aizhu, Editing by Louise Heavens, Robert Birsel

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