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Abu Dhabi, UAETuesday 19 June 2018

Bicycle use spurs Chinese fuel exports

Petrol and diesel demand growth has been slowed by alternative transport such as shared bkes

FILE PHOTO - A worker from the bike-sharing company Ofo gathers its shared bikes in Beijing. Jason Lee / Reuters
FILE PHOTO - A worker from the bike-sharing company Ofo gathers its shared bikes in Beijing. Jason Lee / Reuters

China’s diesel and petrol exports surged in the first half of the year as a domestic supply glut and slowing demand growth prompted refiners to sell more fuel abroad.

Diesel shipments jumped almost 21 per cent in the first six months compared to the same period a year ago, averaging about 328,500 barrels per day (bpd), according to calculations based on data posted on Sunday on the website of the general administration of customs. Petrol exports rose 8.1 per cent, averaging nearly 222,000 bpd.

China’s state-run fuel makers have sent more fuel overseas to draw down stockpiles that have swollen thanks to a refining capacity glut and higher production from independent refiners, known generally as teapots. Meanwhile, the country’s petrol and diesel demand growth has been slowed by alternative transport such as shared bicycles, as well as gas-fed vehicles and electric cars, according to ICIS China, a Shanghai-based commodity researcher.

"Alternative transportation has taken a notable toll on consumption of traditional fuels this year," said Lin Jiaxin, an analyst with ICIS China. "With new refining units coming online in the second half of the year, refiners will have to ship even more overseas."

Average petrol demand in China, the world’s biggest energy user, will grow by 95,000 bpd this year, “dramatically” below gains of 230,000-290,000 bpd during the prior two years, the Paris-based International Energy Agency said in a report this month.

The use of shared bikes in big cities may replace 1.27 million tonnes of petrol demand this year while natural gas cars have already displaced 22 million tonnes of fuel used in transportation in 2016, according to Guo Yifan, an analyst at Shanghai-based Sinolink Securities.

The country’s petrol exports totalled 4.81 million tonnes in the first half of the year, with 770,000 tonnes shipped in June, Sunday’s data showed. Diesel shipments totalled 7.97 million tonnes between January and June, with exports at 1.31 million tonnes last month.