The Chinese government's decision to raise the value-added tax rebate on petroleum products has been hailed by experts.

According to a statement released by the State Administration of Taxation and the Ministry of Finance, the government has raised the value-added tax rebate on exports of oil products, including gasoline, diesel and jet fuel, to 17 percent, starting Nov 1.

With an oversupply of oil products in the domestic market, the tax reimbursement for its exports will encourage more oil product exports and improve corporate revenue and profits, said experts.

According to Wang Lu, an Asia-Pacific oil and gas analyst from Bloomberg Intelligence, China's exports of refined oil products surged this year due to abundant refining capacity.

Ample domestic supply and weakened demand also contributed to its surge, she said.

With an acute shortage of oil product market supplies in the past, the government had previously imposed strict restrictions on the tax refund to discourage exports, according to Han Xiaoping, chief information officer at China Energy Net Consulting Co, an industry consultancy in Beijing.

"However, with a serious surplus of domestic oil products in recent years, the policy will encourage companies to export their products to ease the country's oil refining capacity surplus," he said.

China's petroleum refinery distillation capacity reached 710 million metric tons per year by the end of 2015, according to Su Jun, general manager of the production and operation department of China National Petroleum Corp, while figures from the National Bureau of Statistics reveal that China's total oil production reached 255 million tons during the first nine months this year, a year-on-year 1.6 percent increase.

On the other hand, with slowed economic growth, demand for oil products like diesel is seeing a decrease, and the popularization of new energy vehicles have also contributed to a slowdown of gasoline and diesel demand.

The supply of oil products in 2015 reached 337 million tons, while consumption, despite a year-on-year increase of 4.3 percent, is 316 million tons, still less than supply.

Against such a backdrop, many companies are eyeing markets abroad.

Figures from China's customs authority reveal that January to September diesel exports reached 10.79 million tons, a year-on-year increase of 148.14 percent, while gasoline exports reached 6.93 million tons, a 72.26 percent increase compared with the same period of last year.

Diesel exports in September reached 1.6 million tons, a 44 percent increase, reaching a record.

Wang added that the increase in the tax refund will help lift China's refiners' profits, but the effect might be limited.

"China's increase in the tax refund for exported refined products might have limited impact on Chinese oil majors including PetroChina and Sinopec," said Wang.

"Many exports are processed on order and are not subject to the value-added or consumption taxes and it will take some time to see whether the tax policy will work."