China, formerly Asia's biggest gasoline exporter, plans to cut shipments of the fuel for a fourth consecutive month to meet domestic demand, contributing to a shortage that boosted prices in the region.

Tuesday, June 13, 2006

China, formerly Asia's biggest gasoline exporter, plans to cut shipments of the fuel for a fourth consecutive month to meet domestic demand, contributing to a shortage that boosted prices in the region.
PetroChina and China Petroleum & Chemical Corp, which exported an average of 466,386 tonnes a month last year, may cut shipments to as little as 130,000 tonnes this month, according to three traders involved in the transactions who asked not to be named.

Reduced supplies from China helped to drive benchmark 92-RON gasoline to a record US$90.55 (HK$706.29) a barrel in Singapore on May 15. Soaring demand in the world's third-biggest vehicle market is trimming its gasoline surplus, prompting Beijing to impose restrictions on exports.

The number of civilian vehicles on China's roads rose 21 percent last year to 43.29 million, the National Bureau of Statistics said in February.

"Exports from China are likely to drop significantly in the coming months as the government orders refiners to boost production and limit exports to meet peak summer gasoline demand," Ravi Narayanaswamy, a Singapore-based analyst at Purvin & Gertz, said last week.

While gasoline has declined 8 percent from last month's record amid increased supplies from Taiwan, the price remains 28 percent higher since March, outpacing the 14 percent gain in the price of crude used to make the fuel, according to data.

Taiwan has displaced the mainland as Asia's biggest exporter of the fuel. Gasoline shipments from the island last year averaged 298,000 tonnes a month. The average in the first three months of this year fell to 150,000 tonnes as Formosa Petrochemical shut a crude oil distillation unit and one of its two 73,000 barrel-a-day gasoline- making fluid catalytic crackers for maintenance and upgrading from February 10 until April 19. Supplies have rebounded since the plants restarted.

"Taiwanese refiners are cashing in on this opportunity to export more volume to meet the strong demand in Indonesia and Vietnam," Narayanaswamy said.

China Petroleum & Chemical, Asia's biggest refiner known as Sinopec, exported a 30,000-tonne cargo each this month and last, down from about two cargoes each month in March and April. PetroChina halted exports this month, after selling a 30,000-tonne cargo last month.

West Pacific Petrochemical, or Wepec, jointly owned by PetroChina, Sinochem and France's Total, has kept exports steady at about 100,000 tonnes a month from its refinery in northeastern Dalian.

In April, the mainland exported 237,186 tonnes while importing 13,414 tonnes, according to the latest data from China Administration of Customs. In March, it exported 386,122 tonnes while importing 4,876 tonnes.

In March, Beijing extended the suspension of export tax rebates for motor gasoline and naphtha to discourage refiners from exporting. Withholding the export rebate of 11 percent for gasoline and 13 percent for naphtha will make it more expensive for exporters to ship the fuels overseas, the State Administration of Taxation said on March 21.

On May 24, Beijing raised retail fuel prices for a second time this year to pare refiners' losses and boost retail supplies.

Last summer, provinces such as Guangdong had fuel shortages when gasoline exports jumped 51 percent in August to 856,223 tonnes in July. BLOOMBERG

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 Now where have I heard about this B4?

Rat