Sinopec optimistic about second-quarter profit

After missing its projected earnings for the first quarter, Sinopec Corporation, Asia’s largest refiner, said it is expecting an improvement in second quarter earnings. Sinopec said that massive losses from processing crude oil and selling diesel fuel and gasoline at state-controlled prices resulted in the company’s lackluster performance in the first quarter. Company Spokesman Huang Wensheng said the latest hike in the prices of fuel in China has led to less pressure on refining margins. Sinopec posted a 35% drop in first-quarter profits, with net income reaching CNY13.41 billion (US$2.13 billion) in the first quarter, compared to CNY20.6 billion (US$3.24 billion) a year earlier. The Chinese government controls oil prices to curb inflation, so Chinese refiners are not able to fully pass on higher crude costs to consumers. Fuel price hikes in China are often late and smaller than what is required by a government-set formula which keeps track of changes in the cost of global crude oil. (April 27, 2012)