Subsidy prevents slump in Sinopec profits

China Petroleum and Chemical Corporation (Sinopec), China’s largest oil refiner, announced that its net profits slumped 65.78% in the first quarter from the same period of last year, and were only kept in the black by a 7.4 billion yuan (US$1.06 billion) government subsidy. The 6.7 billion yuan (US$958.4 million) net profit came after Sinopec got 7.4 billion yuan (US$1.06 billion) in subsidy from the Ministry of Finance to compensate for its loss in the oil-refining sector. China has been keeping the domestic price for refined oil products at a lower level despite the surge of international crude oil prices to nearly US$120 per barrel in the first quarter. Sinopec’s total domestic sales volume of refined oil products rose by 9.87% year on year to 30.18 million tons in the first three quarters of 2007. (May 12, 2008)