SHANGHAI – Sinopec Corp., Asia’s biggest refiner by volume, says its first quarter profit sank 35 per cent as government price controls prevented it from fully passing on costs from surging crude oil prices.
The state-owned oil company, also known as China Petroleum & Chemical Corp., said in statement late Thursday that net profit tumbled to 13.4 billion yuan ($2.1 billion). Revenue fell 29 per cent to 21.8 billion yuan ($3.5 billion).
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Sinopec’s net profit rose 2 per cent in 2011.
Beijing controls fuel prices to cushion the impact on the economy of high global crude costs, forcing Sinopec and other refiners to absorb losses. The government has repaid some of those losses in the past with tax rebates or other subsidies.
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The gap between international oil prices and prices at home created 9.2 billion yuan ($1.5 billion) of losses in Sinopec’s refining business.
Sinopec said its output of crude oil rose 4.5 per cent to 81.5 million barrels. Natural gas output climbed 11.8 per cent to 4.05 billion cubic meters.
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