Sinopec is expected to continue to reward its subsidiary refiners for exceeding their oil product production targets in November to ensure its supply to the domestic market, a company source said.
The ex-refinery price of 90-Ron gasoline produced above the target will be at Yuan 8,620/mt in November, up by Yuan 440/mt from that of gasoline produced within the target; the price of zero pour-point gasoil produced above the target will be at Yuan 8,040/mt, up by Yuan 710/mt from the price of zero pour-point gasoil produced within the target, according to the source.
It is the ninth straight month that Sinopec implemented the policy, C1's data showed.
Sinopec has recently asked its underlying petrochemical companies to cut jet fuel production and produce more gasoil to ease gasoil supply tightness, the source also said.
Production profit of jet fuel has been higher than that of gasoil since China started to set jet fuel ex-refinery price based on import cost this August.
The ex-refinery price of jet fuel from Sinopec’s underlying refineries is expected to be Yuan 7,217/mt in November, Yuan 844/mt higher than the post-tax price of gasoil produced within the plan and Yuan 237/mt higher than gasoil above the target.
China levies no consumption tax on jet fuel while imposing Yuan 0.8/liter of the tax on gasoil.
Sinopec may continue the encouraging policy in December, because of refining loss for underlying refiners and limited new refining capacity, the source said.
