Since the last quarter of 2010 China has fought a diesel supply squeeze caused by nationwide power restrictions that led companies to fire-up diesel-powered generators, with refiners pumping at top rates, slashing diesel exports and raising imports that boosted inventories to record highs.

The data from the General Administration of Customs on Thursday showed China exported 95,886 tons of diesel last month, a level also 44 percent below the December rate.

Though the diesel import figure rose 82 percent on year to 183,298 tons, traders cautioned again that it included double counting of oil stored in tax-bond tankages by trading houses such as Gunvor that does not enter the domestic market.

Gunvor, the Swiss-based oil trader alone moved in about 130,000 tons of Russian diesel into its leased tanks in southern China’s Zhuhai last month, a trader with direct knowledge of the situation said.

Still, January imports came off December’s 27-month high at 460,000 tons, as oil firms, highly regulated by the government, rushed to plug a shortage. And the need for imports became much less urgent as inventories expanded after months of record throughput.

With diesel inventories now running high and crude prices hitting a fresh 2-1/2 year peak as Libya unrest cut supplies, Chinese refineries would be keen to export more barrels in March to cash in on export margins, traders said.

Top refiner Sinopec, the sole dominant diesel exporter, has already committed some 100,000 tons for overseas shipment for February.

But the government, which sets the country’s retail fuel prices as well as the refined fuel trade quotas, was equally keen to keep a tight lid on exports due to worries a persistent drought may cause another diesel shortage.

“With the Parliament meetings due to start soon, the government will be extra careful to avoid another diesel shortage,” said a Singapore-based trader that regularly deals with Chinese firms, referring to China’s annual parliament meeting convening in March.

Detailed customs figures also revealed that while China’s total kerosene imports last month jumped 45 percent on year to 711,493 tons, it was mostly due to purchases of 234,000 tons of “other kerosene,” or power kerosene, a fuel that can be quickly turned into diesel.

Chinese independent oil dealers have since around last August been bringing in this unusual fuel that enjoys a waiver of about $125 per ton consumption tax, to fill a supply gap of diesel.

The January amount, however, halved from December’s rate at 475,000 tons, as the imports became less lucrative as more dealers piled into the business.

Customs data also showed China’s fuel oil imports last month rallied 72 percent over January 2010 to 2.43 million tons, which traders attributed to strong demand from China’s local, smaller refineries also known as “teapots” to cash in the lucrative diesel margins.

But traders said demand from teapots for imported fuel oil had started to wane since February and would become even weaker in March as margins start to hurt, even with Beijing’s 4-4.5 percent hike of retail gasoline and diesel prices on Feb. 20.