China's Bonded Bunker Fuel Market Gains Pricing Advantage
China's bonded bunker fuel market has experienced significant changes in recent years, driven by the country's growing role in the marine fuels market.
Dr. Kang Wu, an energy economist specializing in China and Southeast Asia, notes that the Chinese government's 2020 VAT rebate policy for bonded bunker fuel has had a substantial impact on the competitiveness of Chinese ports like Zhoushan compared to traditional hubs such as Singapore.
The rebate extends beyond the VAT, covering the fuel oil consumption tax, which amounts to 1,218 yuan per metric tonne (mt), or roughly $27/bbl. This policy has fundamentally transformed the economics of China's fuel oil exports to bonded areas.
However, despite this advantage, China still relies heavily on imported bunker fuels due to domestic supply constraints. In fact, in 2025, China exported a record 376,000 b/d of fuel oil, while importing 396,000 b/d from countries like Russia and Malaysia.