China oil giants post heavy refining losses in first half

Tag : china chemical

PetroChina and Sinopec, the country's two largest oil companies,suffered a combined refining loss of 5.71 billion yuan (837.24million U.S. dollars) in the first half of 2008 as soaring worldcrude prices added to their production costs.

The loss was 47.9 percent higher than the same period last year,Feng Shiliang, China Petroleum and Chemical Industry Associationdeputy secretary general, was quoted by Monday's Beijing Times assaying.

The country's oil companies have been losing money for each barrelof foreign oil they refined and sold to domestic consumers as theycould not pass along the increase under the government-set refinedoil prices, market analysts said.

World crude prices had surged more than 50 percent since Novemberand now hovered around 130 U.S. dollars per barrel.

They would likely remain at high levels in the second half, between140 U.S. dollar and 150 U.S. dollars per barrel, which meantanother increase in domestic refined oil prices was possible, Fengsaid.

The government raised the benchmark gasoline and diesel oil retailprices to 6,980 yuan and 6,520 yuan per tonne in June, up more than16 percent and 18 percent respectively.
The price increase was helpful but far from eliminating losses,said Sinopec. It said last week that its first-half net profitwould decline by more than 50 percent because of the widening gapbetween the government-set prices of oil products and rocketingglobal crude prices.