Sinopec Corp (中國石化), one of China’s three major state-owned oil companies, said yesterday its profit rose just 2 percent last year, despite a double-digit surge in sales, as government price controls limited its ability to pass on surging crude costs.
The company, also known as China Petroleum & Chemical Corp, said profit rose to 73.2 billion yuan (US$11.6 billion), or 0.84 yuan per share. Revenues rose 31 percent to 2.5 trillion yuan.
Beijing has used price controls to try to cushion the impact on China’s economy of high global crude costs, forcing Sinopec and other companies to absorb losses. The government has repaid some of those losses in the past with tax rebates or other subsidies.
Sinopec, Asia’s biggest refiner by volume, said its refining unit suffered a 35.8 billion yuan operating loss “due to a combination of global crude price surge and continuing price controls on refined oil products in domestic market.”
China’s growth in demand for refined products and chemicals is likely to ease this year as economic expansion slows, Sinopec chairman Fu Chengyu (傅成玉) said.
“The global economy in 2012 continues to face serious challenges and in light of complex geopolitical tensions, international oil prices are expected to remain high,” Fu said in a statement.
Sinopec’s chemicals unit had a 78 percent increase in operating profit to 26.7 billion yuan. Operating profits for exploration and production rose 52 percent to 71.6 billion yuan.
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