MOSCOW (MRC) -- China found three independent oil refiners evaded fuel tax and punished a unit of a state oil major for irregular crude oil trade following months of investigations, part of a broader clampdown to consolidate its massive refining sector, said Reuters.
Under a drive to rein in surplus refining capacity and cut carbon emissions, Beijing last year introduced measures such as cutting import quotas and slapping a hefty tax on imports of blending fuels. That has led to China's first annual fall in crude oil imports, the world's largest, in two decades.
The clampdown is also set to result in a shrinking market share of the small independent refiners in China's oil imports, while allowing state refiners such as Sinopec Corp to reclaim market dominance. "The crackdown on teapots and blenders and the emission policy led to the collapse in 2021 crude imports. These are long lasting effects and will continue into 2022." said Liu Yuntao, analyst with Energy Aspects.
In October, Reuters reported that Unipec, the trading arm of Asia's largest refiner Sinopec, had stepped in to supply crude oil to Liaoning Bora and Panjin Haoye Chemical. A senior official with Bora Group declined to comment when contacted by Reuters and deferred media queries to the Panjin city government. Calls to Haoye Chemical were unanswered.
The firm is a subsidiary under China National Petroleum Corp. PetroChina said earlier it has always been cooperating with the government probe.
As per MRC, global oil refining capacity fell for the first time in 30 years last year, as new capacity was outweighed by closures. Refining capacity was down by 730,000 bpd in 2021, the IEA said, but net additions were expected to amount to 1.2 MMbpd in 2022.
As MRC wrote previously, China's refinery output hit a fresh high in 2021, up 4.3% from a year earlier on robust fuel demand especially in the first half of the year, and as refiners ramped up processing to fill a supply gap after a hefty new tax closed loopholes in blending fuel imports. Total refinery throughput last year reached 703.55 MM tons, or 14.07 MMbpd, data from the National Bureau of Statistics showed on Monday, roughly 620,000 bpd above the 2020 level.