China seen raising Saudi oil imports 11pc in 2013
China seen raising Saudi oil imports 11pc in 2013
China, the world’s second-largest crude consumer, is expected to buy about 1.17 million barrels per day (bpd) of Saudi oil next year, 120,000 bpd more than this year’s contracted amount. The figures are based on estimates by industry sources with direct knowledge of the supply situation.
China, which imports about 5.3 million bpd of crude a year, is Saudi Arabia’s third largest customer after the US and Japan. In the year to October, imports from Saudi grew 8.6 percent on the year to 1.06 million bpd, compared to growth of 12.6 percent in 2011.
Most Asian buyers are being forced to rework import plans to factor in a cut in purchases from OPEC member Iran due to tightening Western sanctions. China, Iran’s top trading partner, has cut imports by 22.2 percent in the January-October period from a year earlier.
China sees Saudi Arabia, the world’s top oil exporter, as a strategic partner capable of providing stable supplies, and the state energy companies of both nations are in a $10 billion joint venture to build a 400,000-bpd refinery on Saudi Arabia’s Red Sea coast.
China’s crude oil demand is one of the factors propping up global crude prices, at around $100 per barrel . This year, China’s oil demand is forecast to grow just 2.8 percent in its slowest pace in more than a decade, the International Energy Agency says, due to a slowdown in the economy, but there are signs of a revival next year.
Sinopec Corp, Asia’s largest refiner, would take in more than 80 percent of the total Saudi supplies to China. China’s No.2 refiner, PetroChina, and state-run Sinochem Corp, will use up the rest, the sources said.
“Sinopec’s imports of Saudi crude have been increasing steadily over the past years and are expected to rise further as Sinopec’s refining capacity will rise steadily over the next few years,” said one Chinese trader.
Sinopec is estimated to increase Saudi imports by up to 80,000 bpd, as it adds new refining facilities at two subsidiary plants, a 200,000-bpd unit started in late November at Maoming in south China and a 160,000-bpd unit at Jinling refinery in east China. Sinopec and Aramco are expected to finalize the 2013 contract soon, traders said.
Most of the new capacity is geared toward processing high sulphur, or sour, crude.
The volume for the Fujian refinery jointly owned by Sinopec, Aramco and Exxon Mobil will remain the same, at 200,000 bpd.
PetroChina will raise its 2013 Saudi crude term volumes by 40,000 barrels per day (bpd) to around 160,000 bpd, up a third from 2012, trading executives have said.
The total increment matches the increase Sinopec agreed with Iraq, the world’s fastest growing crude exporter, as the refining giant sought to diversify supplies.
Jordanian cabinet approves new IMF-guided tax law to boost finances
AMMAN: Jordan’s cabinet on Monday approved major IMF-guided proposals that aim to double the income tax base, as a key part of reforms to boost the finances of a debt-burdened economy hit by regional conflict.
“When only 4 percent of Jordanians pay (personal) income tax, this may not be the right thing,” Finance Minister Omar Malhas said in remarks after the cabinet meeting, adding the goal was to push that to eight percent. The draft legislation was submitted to parliament.
The IMF’s three-year Extended Fund Facility program aims to generate more state revenue to gradually bring down public debt to 77 percent of GDP in 2021, from a record 95 percent.
A few months ago Jordan raised levies on hundreds of food and consumer items by unifying general sales tax (GST) to 16 percent — removing exemptions on many basic goods.
In January subsidies on bread were ended, doubling some prices in a country with rising unemployment and poverty among its eight million people.
The income tax move and the GST reforms will bring an estimated 840 million dinars ($1.2 billion) in extra annual tax revenue that will help reduce chronic budget shortfalls normally covered by foreign aid, officials say.
Corporate income tax on banks, financial institutions and insurance companies will be pushed to 40 percent from 30 percent. Taxes on Jordan’s phosphate and potash mining industry will be raised to 30 percent from 24.
The government argues the reforms will reduce social disparities by progressively taxing high earners while leaving low-paid public sector employees largely untouched.
“This is a fair tax law not an unfair one,” said Malhas, who shrugged off criticism the law is lenient on many businesses connected to politicians whose transactions are not subject to tax scrutiny.
Husam Abu Ali, the head of the Income and Sales Tax Department, said a proposed IMF-recommended Financial Crime Investigations Unit will stiffen penalties for tax evaders. Critics say it will not tackle pervasive corruption in state institutions.
Abu Ali said the government could be losing hundreds of millions of dollars through tax evasion, which is as high as 80 percent in some companies.
The amendments lower the income tax threshold and raise tax rates. Unions said the government was caving in to IMF demands and squeezing more from the same taxpayers.
“It is penalizing a group that has long paid what it owes the state,” the unions syndicate said in a statement.
“It imposes injustice on employees whose salaries have barely coped with price hikes rising madly in recent years.”