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Gasoline import margin improves but still negative after import tariff cut

https://www.chemnet.com   Jul 08,2011
Gasoline import margin for Chinese importers was still in negative territory, although the margin improved somewhat on the government’s cut in import tariff.

In Singapore market, FOB price of 92-Ron gasoline, which has similar specifications with 93-Ron gasoline in China, was US$116.5/bbl on average during Jun 24-Jul 7, versus the average of US$119.5/bbl two weeks ago.

Calculated by the latest price, import cost of the fuel was Yuan 9,479/mt, with freight rates and taxes inclusive, Yuan 289/mt higher than wholesale prices of 93-Ron gasoline in South China. The cost was Yuan 667/mt higher than domestic sales two weeks ago.

If calculated by US$116.5/bbl of gasoline price in Singapore, Chinese refineries could reap about Yuan 6,422/mt of earnings by exporting 93-Ron gasoline to Singapore under processing trade when excluding freight rates. The refineries could get Yuan 6,295/mt, about Yuan 127/mt lower, by selling such resources in domestic market if calculated by Yuan 8,989/mt of ex-refinery price from Sinopec Guangzhou Petrochemical, with Yuan 1,388/mt of consumption tax and 17% value-added tax deducted. Export earnings were Yuan 296/mt higher than domestic sales two weeks ago.

China may not import a large amount of gasoline in the near term because of still negative import margin and sufficient supply in the domestic market, market sources predicted.
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