CHINA DATA: Pakistan becomes top receiver of China's gasoline in 2021

Pakistan emerged as the top destination for China's gasoline exports in December, with the country receiving 398,000 mt of gasoline, up 80.3% month on month, data released by the General Administration of Customs showed Jan. 25.

The sharp increment in Pakistan's December imports from China also made it the top second destination for China's gasoline outflows, with the 2021 figure standing at 2.25 million mt, surging 414% year on year, the highest among the top five destinations.

In December, a number of refineries in Pakistan halted operations, fully or partially, due to rising stocks of fuel oil, also known locally as furnace oil, potentially leading to a shortage of refined products like gasoline, Platts has reported.

Industry demand for gasoline has increased in Pakistan in the last year, following a speedy opening of the economy post COVID-19 lockdowns, according to a report from AKD Securities.

In addition to Pakistan's growing appetite, gasoline exports to Indonesia also rose sharply, increasing 189.3% on the month to 104,000 mt in December. In 2021, the combined exports to the country amounted to 1.05 million mt, up 134% from 2020.

Among the top five recipients of China's gasoline outflows in 2021, Pakistan and Indonesia received more arrivals, registering year-on-year growth of 414% and 134%, respectively.

This comes even though overall exports from China dropped 9.1% on the year to 14.55 million mt in 2021.

While Pakistan had a prominent role in garnering gasoline imports from China, sources noted that this could change in future.

"With the cut in oil export quotas out of China, Pakistan will have to look elsewhere to fulfill its gasoline needs. The country is usually a net importer of the motor fuel," said a Singapore-based source.

"[Pakistan] will likely import more gasoline from India moving forward, as independent refiners are able to export gasoline out of the country," the source added.

Meanwhile, Singapore's 2021 imports from China dipped 30.1% on the year to 5.64 million mt. As a result, its share as destination for China's gasoline imports fell to 38.7% in 2021 compared to 50.4% in 2020.

Gasoil prospects

China's gasoil outflows remained subdued throughout October-December, due to a relatively strong demand in the domestic market.

In December, China's overall gasoil exports dropped by 45.7% on month to 325,000 mt. Outflows were down 78.2% on year from 1.49 million mt in 2020.

The Philippines was the largest gasoil importer in December with 119,000 mt, bringing the country's inflows from China to 4.39 million mt in 2021. With 2021 imports up 4.7% on year, Philippines also ranked as top destination for China's gasoil outflows for the year.

Bangladesh also imported heavily from China in 2021. It received 2.1 million mt of gasoil from China last year, up 31% on the year.

As was the case with gasoline, China's total gasoil imports also declined on year in 2021.

The crunch in export volumes from China had kept regional supplies lean, industry sources said, and as a result, pushed Asian gasoil prices to higher levels. The FOB Singapore 10 ppm sulfur gasoil cash differential averaged 64 cents/b to Mean of Platts gasoil assessment in December, up 5 cents/b or 8.48% from the averaged plus 59 cents/b in November.

This rise in gasoil prices came despite a typically lull season during the end of the year, when trade activity tapers off ahead of the year-end holidays.

"This time [December 2021] is a bit different [compared to previous years], market is tight and people are looking for cargoes. Demand [in the region] is looking steady," a trade source based in Singapore said.

Another industry source agreed, adding "with lower Chinese exports, any surplus barrels will be absorbed [within the region] ... Middle East and India barrels may swing East if prices are more attractive here".

Top 5 destinations for China's gasoline exports ('000 mt):

Top 5 destinations for China's gasoil exports ('000 mt):

Source: General Administration of Customs

Notes: *including exports to other countries