The Chinese government will adjust down fuel oil import tariff to 1% from present 3% in the near term, some market sources said. Some independent refineries in East China’s Shandong province are planning to defer delivery of their June fuel oil cargoes to July to reduce import costs, they said.

C1’s data indicated import costs of Russian M100 fuel oil into Shandong will drop by Yuan 117/mt after the tariff cut, based on a CFR premium of US$72/mt over Singapore June mean price. 

However, sources with Qingdao Customs and some governmental departments said they have not received any formal notification from the government or not even heard of the news yet.

But some Huangpu importers believed that it is possible for the government to lower the import tariff.

“South China’s fuel oil imports kept shrinking in recent years due to the steep negative import margins,” the source explained, “it is time for the government to take some actions.”

As C1 reported earlier, the Ministry of Finance announced on Dec 26, 2007 to reduce import tariff for No. 5-7 fuel oil (HS code: 27101929) from 6% to 3% as from Jan 1, 2008; and cut down that for wax oil (HS code: 27131210) from 6% to zero at the same time.