China's gasoline export to grow amid car sales boom

(chinatrucks.com, Feb.04, 2010)China expects its gasoline demand this year to grow half the rate of new car sales, but refineries will quicken their pace and may have excess fuel for export, Reuters reported.

Government tax incentives will continue this year to boost auto sales, which may reach a record 11.9 million new cars, after last year's increase of 52.9% to 10.3 million units, but lines at gasoline pumps will be shorter because many car models carry small fuel-efficient engines, or use no gasoline.

Last year China set retail fuel rates in line with global prices of crude, a move that triggered a surge in refinery output that yielded so much gasoline and exports rose despite the surge in sales of new cars that consume 90% of the fuel.

"So long as China raises crude runs, Chinese refineries will be increasing supplies of gasoline that will meet or even outpace gasoline demand," said an industry expert. And China's total fleet of cars is not so large yet that refiners fail to meet new demand.

As a signal for this year's production, China exported almost 1 million tons of gasoline in December, the biggest monthly volume ever, with refiners forecast to process 560,000 bpd more crude than last year's 7.5 million.

Net gasoline exports rose to 4.9 million tons, or 114,000 barrels per day (bpd) in 2009, from 46,618 tons (1,000 bpd) in 2008 left over from a stockpile built for the Beijing Olympic Games.

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