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China hikes 2019 non-state oil import quota as private refiners expand

China has hiked its 2019 crude oil import quota for “non-state trade”, generally meaning independent refiners, by 42 per cent to 202 million tonnes, as two private companies prepare to launch commercial production at major new plants.

It is the second consecutive year that Beijing has increased the quota, which is equivalent to 4.04 million barrels per day (bpd). However, the spike is lower than 52 per cent growth for 2018.

The Commerce Ministry said in a statement companies must submit their applications for the quotas by Nov. 10.

The ministry did not provide a detailed breakdown of quota recipients, but they should include mostly independent refiners, which make up around two-thirds of the total.

“The main reason is that some major independent refineries have new production capacity that will go online in 2019,” said Dong Xiucheng, a professor at the China Petroleum University.

At least two private refiners, Hengli Group and Zhejiang Petrochemical, are preparing to launch commercial production of two new large plants.

The move also underscores the growth of large private refiners, which are looking to build new petrochemcial plants making plastics, rubber and polyester as middle-class consumers demand high-end goods from cars to electronics.

The government has cracked down on smaller operators, often known as teapots, which often use outdated equipment to make lower grade fuels.

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