Sinopec Margins Set to Extend Slump as Fuel Prices Trail Rising Crude Cost - Bloomberg

China Petroleum & Chemical Corp. , Asia’s biggest refiner, may extend a slump in profit from making gasoline and diesel as government price controls prevent the company from passing on higher crude-oil costs to customers.

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Margins from processing oil fell 45 percent in the first six months as crude costs surged 84 percent, the company known as Sinopec said in its earnings statement yesterday. Net income in the three months ended June 30 dropped 10 percent after rising almost 40 percent in the first quarter. China controls fuel prices to curb inflation in the world’s second-largest economy and the government has raised tariffs once this year compared with five increases in 2009. Sinopec, which gets 80 percent of its revenue from producing and selling fuels, may step up acquisitions of oil and gas fields to reduce the Beijing-based company’s reliance on refining.

Sinopec Margins Set to Extend Slump as Fuel Prices Trail Rising Crude Cost - Bloomberg