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OIL: Teapot Refiners Cut Oct Fuel Oil Imports: Platts

OIL
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China’s independent refineries, mainly in Shandong, cut their fuel oil feedstock procurement in October as new tax deduction regulations will be effective soon, sources told Platts.

  • "Some refiners are still buying fuel oil as they don't have crude import quotas, there is no other choice for them," a Teapot source told Platts.
  • In September, refiners imported around 1m mt of fuel oil, up 21% on August and a four-month high.
  • Beijing is expected to alter the consumption tax regulation on fuel oil and bitumen blend which would put a higher tax burden on teapots, hampering their profits.
  • The consumption tax will only be offset based on the amount equivalent to the actual yield of gasoline and gasoil, typically around 60%. This will be much higher than the previous ratio of around 100%.
  • Moreover, if crude import volumes remain the same as in the previous three quarters, independent refiners will likely face a crude import quota shortage of 5.5m mt, sources said.

 

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China’s independent refineries, mainly in Shandong, cut their fuel oil feedstock procurement in October as new tax deduction regulations will be effective soon, sources told Platts.

  • "Some refiners are still buying fuel oil as they don't have crude import quotas, there is no other choice for them," a Teapot source told Platts.
  • In September, refiners imported around 1m mt of fuel oil, up 21% on August and a four-month high.
  • Beijing is expected to alter the consumption tax regulation on fuel oil and bitumen blend which would put a higher tax burden on teapots, hampering their profits.
  • The consumption tax will only be offset based on the amount equivalent to the actual yield of gasoline and gasoil, typically around 60%. This will be much higher than the previous ratio of around 100%.
  • Moreover, if crude import volumes remain the same as in the previous three quarters, independent refiners will likely face a crude import quota shortage of 5.5m mt, sources said.

 

Keep reading...Show less