Asia/Pacific News
China's Teapot Refineries in Rebate Cut Squeeze: Report
Fiscal changes to refined oil production are curtailing production at independent refineries in eastern China.
A number of the plants, which are also known as teapot refineries, have either stopped -- or plan to -- for an indefinite period of maintenance.
New tariff and tax policies that have increased operator losses are behind the shutdowns, according to a report by business news provider Asia Financial citing industry sources.
At least four plants with a combined annual processing capacity of approximately 18 million metric tonnes either closed crude oil distillation units this month or plan to in February after Beijing cut rebates on consumption tax paid for feedstock imports, sources were reported as saying.
Teapot refineries process straight-run fuel oil or a tar-like heavy residue called bitumen blend, into transportation fuels or asphalt.
At the start of this year, China raised import tariffs for fuel oil and enforced changes to tax rebates, the report said.
