As 2015 comes to an end, Dongming Petrochemical has secured its first export quota for refined oil products

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According to JinYinDao, the policy allowing local refineries to export refined oil under quota has been implemented; Dongming Petrochemical has been approved for a quota of 10,000 tons for refined oil exports in the fourth quarter of 2015. This marks the first step in allowing private enterprises to utilize export quotas for refined oil products, thereby expanding the sales channels for locally produced refined oil. According to relevant sources, the refinery has already begun handling matters related to the export of refined oil products. Furthermore, some industry insiders familiar with the process of refined oil exports say that the export volume of such oil generally starts at 40,000 tons; bulk shipments are used to reduce transportation costs. The actual operational costs for an export quota of 10,000 tons will be higher, as this quota has more of a symbolic significance. However, some industry insiders speculate that Dongming Petrochemical is a company controlled by CNPC and holds a significant shareholding interest; as such, the refinery can carry out exports through CNPC’s network, which would make the operations more convenient. Looking ahead, refineries under companies with Chinese-owned backgrounds, such as Sinochem and Sinochem International, are likely to have smoother operations in exporting refined oil products. As the first local refinery to obtain quotas, Dongming Petrochemical, although with a limited share and currently facing modest export profits, holds significant symbolic importance for the marketization process of domestic refined oil products. As the upstream raw material supply is improved and sales channels continue to expand, the competitiveness of local refineries will increase steadily, and their role in the domestic energy sector will be reassessed. Prior to this, industry insiders have indicated that refined oil quotas for refineries such as Lijin Petrochemical, Kenli Petrochemical, and Yatong Petrochemical are also in the process of application; it is likely that these three refineries will not be able to obtain their quotas for the fourth quarter of 2015. However, the pace of market liberalization is accelerating, and the export quotas for 2016 are expected to be announced soon.