For the first eleven months of 1998, China imported a total of 13.26 million tonnes of fuel oil, up 23 per cent from a year ago, Chinese customs figures showed.

Traders estimated that China's 1998 fuel oil imports would be about 14.5 to 15 million tonnes.

"The import volume is seen to keep at least the 1998 level in 1999," a Beijing-based Sinochem trader said.

The key ports for fuel oil imports are Huangpu, in South China's Guangdong province, followed by Shanghai and Fujian. Huangpu alone received nearly 10 million tonnes of imported fuel oil in 1998, a Hong Kong-based Chinese trader said.

Officials charged with fuel oil import quotas declined to comment on the exact volume.

But an official with the State Economic Trade Commission (SETC) said the quota was likely to be issued by the end of January.

The import volume of fuel oil would have to be decided together by SETC and the ministry of foreign trade and economic cooperation (Moftec), official sources said.

They said that the distributor of import quotas had yet to be decided by the State Council, China's Cabinet.

But an SETC official told Reuters that the policy would in Principle favour SETC to become the quota distributor.

SETC would issue the import quota to local end users via economic and trade commissions at provincial and municipal level, the official said.

A Moftec official contacted by Reuters declined comment.

Fuel oil import volume and quota distribution used to be handled by the State Planning Commission and planning commissions at local level, official sources said.

China's fuel oil imports posted have posted two digit increases since the end of 1995 cut fuel oil production to turn out more value-added middle distillates, industry sources said. million tonnes in 1996, and 12.67 million tonnes in 1997.

In the first 11 months this year, domestic fuel oil production fell 8.8 per cent, official statistics show.

Ex-refinery prices for fuel oil remain regulated, industry sources said.

They are now set at a range of between 1,270 yuan ($153) and 1,390 yuan ($168) per tonne as compared with fob Singapore prices of between $64 to $67 per tonne.