China’s bonded bunker tax regime has allowed its ports to offer delivered marine fuel at a typical discount of $15 to $30 per tonne to Singapore, according to energy economist Dr Kang Wu.
The 13% VAT export rebate applies to fuel oil supplied to international vessels at Chinese coastal ports. The measure was announced in January 2020 and took effect on 1 February 2020, while China’s fuel-oil consumption tax stands at CNY 1,218 ($181.25) per tonne.
Wu, who specialises in China and Southeast Asia at Global Energy Research and Educational Training Pte. Ltd., said the tax structure has helped domestic refiners compete with imported bonded fuel.
Chinese bunker prices, however, remain closely linked to Singapore. Latest Baltic Exchange assessments show how quickly the advantage can narrow. VLSFO was assessed at $775 per tonne in Zhoushan, China, on 27 August, only $1 below Singapore at $776. HSFO was $627 per tonne in Zhoushan against $620 in Singapore, while LSMGO stood at $1,197 compared with $1,136.
The gap was much wider in late June, when low-sulphur bunker prices in Zhoushan and Shanghai were around $50 per tonne below Singapore.
China exported 2.73m tonnes of fuel oil, mainly for marine bunkering, in June, up 55% from May and 18% year on year. First-half exports reached 10.87m tonnes, up 7.7%.
The spread remained volatile through August. Singapore VLSFO was $19 per tonne more expensive than Zhoushan on 13 August. By 25 August, Zhoushan carried a $10 premium to Singapore, narrowing to $6 the following day. Zhoushan supplied 8.0271m tonnes of bonded marine fuel in 2025, up 10.6%.
China’s marine-fuel exports rose 11.6% to 20.47m tonnes that year, while fuel-oil imports fell 10.4% to 21.6m tonnes. China allocated 8m tonnes of low-sulphur marine-fuel export quotas in its first 2026 batch and another 5m tonnes in June. Wu said the volume and timing of quota allocations can tighten supply at bonded ports and temporarily erase China’s price advantage.