Image Credits: Manifold Times
China Petroleum & Chemical Corporation (Sinopec) has started a programme to encourage local subsidiary refineries to boost very low sulphur fuel oil (VLSFO) production, according to Reuters.
It noted Sinopec offering its refineries a reward of 150 yuan ($23.35) for every tonne of VLSFO produced.
The development is seen as an effort to capture increased market share of the local marine fuels market, and a coping mechanism to help prevent local refineries from being idle due to diesel oversupply.
“With the massive diesel surplus in the domestic market, Sinopec does not need to process that much diesel itself so why not make use of the processing capacity to boost marine fuel?” said a senior source, as quoted by Reuters.
Though the duration of the bonus scheme is unclear, the move has resulted in Zhoushan’s VLSO bunker fuels prices being offered at a discount to that of similar product lifted from Singapore port.