China’s fuel exports drop to June low as refiners use up quotas

China’s exports of gasoline, diesel and other fuels fell to the lowest in four months in October as refiners risk exhausting government quotas that expire at the end of the year. 

Overseas shipments of oil products fell 5% from a month earlier to 5.17 million metric tons in October, according to customs data released Tuesday. Imports of crude rose.

Refiners in the world’s biggest oil consumer are facing a shortage of export permits after the government told them in September it wouldn’t increase the number, which is already above last year’s total. That could potentially tighten global markets and increase fuel prices in a boost to processors outside China that are grappling with declining margins.

Oil processors had used up 80% of their export allowances by end-September, according to Li Chunyan, an analyst with industry consultant OilChem. That rate could rise to 95% by the end of this month on the basis of preliminary export plans, she said.

China will publish a breakdown of oil product exports on Nov. 18. The category also includes fuel oil, jet fuel and naphtha.

Meanwhile, crude imports rose 7% from the previous month to 48.97 million tons in October, the highest level since August, Tuesday’s data showed. That’s equivalent to about 11.6 million barrels a day. The increase comes as private refiners were granted more import permits and state plants received more cargoes from top supplier Saudi Arabia under long-term contracts.