China: China's Diesel exports rose for a second consecutive month in December, reaching 2.79 million tonnes, according to the General Administration of Customs. This marks an increase of 32.8% from November's 2.10 million tonnes and is the highest since March 2021.

At the same time, Gasoline exports climbed for a third consecutive month as China's COVID outbreak limited domestic fuel demand. Total Diesel exports for the year amounted to 10.92 million tonnes, compared to 17.21 million tonnes for 2021. Refiners were able to capitalize on their expanded yearly export quotas during this period, resulting in a significant rise in both Diesel and Gasoline exports from the previous months.

In December, China exported 1.91 million tonnes of Gasoline, marking the highest level since October 2020 and up from 1.49 million tonnes the month before. Total Gasoline exports for 2022 stood at 12.56 million tonnes, compared to 14.54 million tonnes in 2021.

Refiners took advantage of their yearly export quotas after COVID-19 restrictions have severely hindered domestic fuel demand throughout the year. At first, domestic travel picked up significantly when restrictions were lifted in November; however, a nationwide spike in COVID cases in December led people to stay at home and depressed both consumer and industrial fuel demand domestically.

To help prop up their pandemic-battered economy, the government allocated an additional 13.25 million tonnes of export quota for Diesel, Gasoline, and jet fuel that brought their total 2022 quota to 37.25 million tonnes - equal to 2021's quota.

The government recently announced its first refined product export quota for 2023 at around 19 million tonnes to further increase demand. At the same time, road traffic volumes have been on the rise in some large cities.

With the Lunar New Year - falling on January 21 - drawing near, millions of Chinese are expected to travel for the week-long holiday, which is likely to drive local consumption of refined products such as Petrol and Kerosene.