China is considering allowing its oil refiners to export more fuel in an attempt to help revive its economy, which would be a reversal from a focus on minimizing emissions. 

Refiners and traders have applied for an extra 15 million tons of fuel export quota that includes gasoline and diesel, according to people familiar with the matter. If approved, that would increase the allocations so far this year to a similar level for the whole of 2021. 

Beijing maintains strict control over how much both its state-owned and private refiners can export. It’s been curbing shipments recently to reduce pollution and help consolidate the sector, with the amount of quota allocated so far in 2022 about 40% less than last year.

China’s desire to boost economic activity could be behind the possible increase in quota, said the people who asked not to be identified as the discussions are private. The Covid Zero policy and a property crisis have weighed on Asia’s largest economy this year, with several major banks forecasting growth will be less than 3%.

The Ministry of Commerce didn’t immediately reply to a fax seeking comment.

The application for the additional export allocations comes as a batch of 1.5 million tons of quota is expected to be granted to Chinese refiners later this week. If the 15 million tons are approved that would take this year’s total to 39 million tons, compared with about 38.6 million tons last year. 

Increased fuel exports and more efficient use of refining capacity are ways to support the economic recovery, Fu Xiangsheng, an official from the China Petroleum and Chemical Industry Federation, said at an industry conference last month. The country’s state-owned refiners were running at 75.3% of capacity in the week through Sept. 10, according to CITIC Futures Co., a much lower level than in the US.

China has exported a monthly average of 1.95 million tons of diesel, gasoline and kerosene in first seven months of this year, according to customs data. That compares with at least 5 million tons a month of exports that would be possible in the last three months of the year under the potential new quota, if it is confirmed. The nation exported an average 3.4 million tons of the fuels in 2021 on a monthly basis. 

More Chinese fuel exports would be bullish for global prompt crude demand and prices, given that China is the world’s biggest oil importer, though it may help to lower oil-product prices due to increased supply. Extra quota could potentially trigger some spot crude buying from Chinese refiners, according to traders.