30 Oct 2009 16:33

New fuel pricing policy lifts Sinopec's net profits by 230 pct

Shanghai. October 30. INTERFAX-CHINA- China's new domestic fuel pricing policy has help boosted the net profits of China Petroleum Chemical Corporation (Sinopec) by 230 percent over the first three quarters of this year, according to the Q3 earnings report the company released on October 30.

Sinopec, the listed vehicle of China's largest refiner, witnessed sales revenues drop by 21.7 percent year-on-year to RMB 893.448 billion ($130.81 billion) over the first three quarters of this year.

Yet its net profits over the same period surged 230.3 percent year-on-year to RMB 49.714 billion ($7.28 billion).

The company attributed its sharp profit growth to the new fuel pricing regime launched in China at the beginning of this year. The new regime is targeted at better protecting Chinese refiners' profit margin by tracking domestic retail fuel prices closer to the movement of international crude oil prices.

Under the new fuel pricing regime, the National Development and Reform Commission (NDRC), China's state economic planner, has promised to adjust the domestic fuel prices every 22 working days in line with movement of the international crude oil prices. Prior to the new pricing regime, NDRC had artificially capped the domestic fuel prices lower to curb inflationary pressure.

Sinopec produced 31.73 million tons of crude oil over the first nine months of this year, up 1.28 percent year-on-year. It produced 6.117 billion cubic meters of natural gas over the same period, up 0.20 percent year-on-year.

The company processed 134.39 million tons of crude oil over the first three quarters, representing an annual increase of 2.99 percent. It produced a total of 83.63 million tons of oil products (gasoline, diesel and kerosene) over the same period.

As the largest gas station operator in China, Sinopec said it has controlled 29,522 gas stations in China by the end of September this year. Its average single gas station oil products sales stood at 2,663 tons in the first three quarters of this year, according to the company's Q3 earnings report.