China punishes PetroChina unit for irregular oil trade

A PetroChina petrol station is pictured in Beijing, China, March 21, 2016. REUTERS/Kim Kyung-Hoon

BEIJING, Jan 19 (Reuters) – China has punished PetroChina Fuel Oil Co Ltd for irregular trading of imported crude oil, the state planner said on Wednesday.

PetroChina Fuel Oil’s irregular trade of imported crude oil totalled 179.5 million tonnes since 2006, which was sold to 115 independent refineries, a probe by a joint investigation team under the cabinet showed, according to a statement on the state planner’s website.

PetroChina Fuel Oil is a subsidiary under China National Petroleum Corp (CNPC), and a major crude oil supplier to China’s independent refineries.

The irregular trade “severely disrupted oil products market order… facilitated blind development of outdated production capacity at independent refineries…caused losses in government tax revenue indirectly,” the National Development and Reform Commission said.

Beijing confiscated illegal profits PetroChina Fuel Oil gained from such trade, according to the state planner.

Reuters exclusively reported in last June that Chinese authorities have ordered PetroChina Fuel Oil to stop trading off crude oil import quotas with local refineries as part of a crackdown on excessive fuel production, citing sources. read more

CNPC has subsequently removed three trading executives amid the government investigation into crude oil reselling to independent refineries, sources told Reuters in June.

Reporting by Hallie Gu and Chen Aizhu; editing by Jason Neely and Louise Heavens

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