China Bonded-Bunker Plans Developing Slowly, Broker Says

Plans to issue more licenses to supply tax-exempt ship fuel in China are developing slowly, according to the Shanghai Shipbrokers Association, which is involved in drafting the new regulations.

“The central government is still studying the plan and formulating the rules and we don’t expect a result in the short term,” Liu Xunliang, secretary-general of the association, said at a conference in Hong Kong today.

China’s Ministry of Commerce is developing a plan to issue more licenses for bonded bunker fuel, which is exempt from import taxes because it is sold to vessels traveling overseas. The ministry has received applications from five companies, Zhou Yiqing, the manager of the bunker department at Sinopec Fuel Oil Sales Co., a unit of China Petroleum & Chemical Corp. (600028), the nation’s biggest refiner, said in October.

The five companies that applied for licenses include state- owned China National Aviation Fuel Group Corp., the country’s biggest jet-fuel distributor, China Arts Huahai Import & Export Corp., and Shanghai Fuel Co., Zhou said then. Five Chinese companies are currently licensed to sell bonded bunker fuel, he said.

The new applicants may not be ready to start operations because of a lack of experience and expertise in global bunker markets, according to Liu.

To contact the reporter on this story: Winnie Zhu in Singapore at wzhu4@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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