This is largely thanks to the government’s stimulus programs. The sustainable home appliances scheme, for example, has been expanded this year, and consumption has grown significantly. The government is also planning to boost consumption by raising the deficit rate of local governments. Many private companies have been facing financial issues because they haven't received payments from local authorities, and this move aims to address that.
China’s Oil Demand & Product Quotas
Gasoline usage has remained largely stable compared to a year ago. Diesel demand, however, is still declining, while jet fuel demand continues to grow. Overall, clean products demand is slightly lower than last year. In response, oil majors like Sinopec are planning to increase chemical production -such as ethylene - significantly in 2025. This shift could boost crude throughput by about 3 million metric tons for the year, as they pivot toward chemical feedstock demand rather than fuel consumption.
Product Export Quotas
Chinese oil majors are facing pressure to export gasoline, diesel, and jet fuel. Notably, the government has released the second batch of oil product export quotas earlier this year, compared to during Q2 in 2024. This allows refiners to plan ahead and avoid running out of quotas without a new batch in place for its operations.
Iranian Crude Imports Amid Sanctions
Independent refineries in Shandong have adopted a ‘wait and see’ approach to US sanctioned crude. They’ve slowed down purchases of Iranian oil and are monitoring how the situation evolves before resuming. There's been no official directive from the government to halt such imports, but companies are cautious about how sanctions might impact their operations.