Sinopec is expected to still have insufficient gasoline to meet demand in the third quarter because of limited spare capacities for production and suspended outsourcing, according to a company source.
"Gasoline output of subsidiary refineries would not rise much in the near term, because most of the refineries have been running at full blast," said the source.
Sinopec plans to produce 3.14-mil mt of gasoline in August, up by only 30,000mt from the average monthly output in the second quarter of the year, the source told C1.
Although the refiner encouraged gasoline production in the second quarter, underlying refineries produced only 310,000mt more in total, added the source.
Sinopec's gasoline outsourcing volume slumped to 480,000mt in July, after the oil giant suspended outsourcing of blended gasoline due to quality problems in end May.
"It is hard to outsource enough gasoline, because the supply of national standard gasoline from PetroChina and CNOOC is limited,"the source also said.
Sinopec is originally scheduled to outsource 960,000mt per month of gasoline to make up supply shortage in the first half of this year. It outsourced over 1-mil mt per month on average in the first quarter.
Even if Sinopec skipped gasoline exports, which are usually 40,000-60,000mt per month, the supply gap is expected to still hit about 40,000mt.
"The gap can be partly made up by existing stocks, but it is not the solution in the long run,"said the source.
Sinopec's gasoline inventory for July fell to as low as that in this January, according to preliminary estimation.
