Asia's biggest refiner, Sinopec, said Monday that its first-half net profit fell 77 percent from a year earlier due to losses in its refining business. The company, whose full name is China Petroleum and amp; Chemical Corp., said in a statement to the Hong Kong Stock Exchange that its net profit, according to international accounting standards, was 8.3 billion yuan ($1.2 billion) in January-June. That compared with 37.8 billion yuan in net profit in January-June 2007. A gap between surging global crude oil prices and controlled domestic prices for processed oil products means China's refiners are losing money on any oil they refine. According to the official Xinhua News Agency, Sinopec said it lost 46 billion yuan ($6.7 billion) in refining in the first half of the year. The company warned that it expects a year-on-year decline of more than 50 percent in net profit for the first three quarters of the year. Sinopec said in its statement that it received government subsidies totaling 33.4 billion yuan ($4.9 billion) in the first half of 2008. International crude oil prices surged more than 50 percent in the first half of the year, peaking at $147 a barrel on July 11. They now hover near $114 a barrel. Sinopec processed 84.3 million tons of crude oil in January-June, up 6.7 percent from the same period of 2007, it said. With the economy still growing at a rate of about 10 percent, demand for oil and oil products remains strong. Consumption of oil products, such as gasoline and diesel, rose 14 percent in the first half of the year compared a year before, while ethylene demand rose 2.5 percent, Sinopec said.
