Source – According to data from the International Trade Monitor, US Energy Information Graph
In June this year, China introduced a new consumer tax policy that would hurt two oil imports – a mixture of blended spices and a blend of diesel oil. These bodies were previously exempt from Chinese consumption taxes. The new policy will reduce China’s imports and exports of petroleum products.
In the first half of 2020 and 2021, China imported light cycle oil and mixed perfumes before importing these products. After the tax was implemented, China’s light cycle oil imports fell by an average of 390,000 barrels per day in the first six months of 2021 to 20,000 B / d in July to 20,000 B / d and 30,000 B / d in August. Two months after the policy change. Similarly, Chinese algae imports fell by an average of 170,000 B / d to 70,000 in July and 30,000 B / d in August in the first six months of 2021.
Under the new tax policy, light cycle oil and mixed fragrances may not be economical for gasoline and diesel blends, but Chinese policy imposes a tax cut on these fuels when used for petrochemical production, which may explain why these fuels are still imported, albeit at lower levels.
These tax policy changes are affecting China’s oil exports. In the first half of 2021, it exported relatively large amounts of distillation and gasoline. However, under the new tax policy, domestic refineries have reduced exports, which could offset the supply of light cycle oil and mixed perfumes.
Source – According to Bloomberg LP, US Energy Information Graph
Main contributor: Jimmy Troderman