BIZCHINA / Opinions
Fuel price hike 'not enough': Sinopec
(SD-Agencies)
Updated: 2006-05-26 13:47
China Petroleum & Chemical Corp, Asia's biggest oil refiner, said the
decision to raise fuel prices won't end a year of refining losses caused
by higher crude oil costs, according to a Shanghai Daily report Thursday.
"It's not enough yet," Chairman Chen Tonghai said at a shareholders
meeting in Beijing on Wednesday, after the government increased the price
of gasoline Tuesday by 10.6 percent, diesel by 12.3 percent and jet fuel
by 10.3 percent.
Retail gasoline prices in China have gained 18 percent this year, lagging
behind the 40 percent increase in Singapore, Asia's biggest oil-trading
center. Sinopec had a 7.88 billion yuan (US$982 million) operating loss
from refining in the first quarter because of government price controls,
designed to shield consumers and companies from rising energy costs.
PetroChina had a refining and marketing loss of 19.8 billion yuan last
year, compared with a profit of 11.9 billion yuan in 2004, the company
said March 20.
In Asia's free markets, refiners' profits from turning crude oil into
gasoline, diesel and other products rose to a nine-month high after plant
shutdowns increased demand from countries such as Australia, Japan and
Indonesia.
"The price hike is not going to completely ease our refining losses,"
Zhang Jingming, company secretary at Sinopec Shanghai Petrochemical Co,
China's largest ethylene maker, said in a telephone interview Wednesday.
"An increase of about 1,000 yuan a ton would have eased the losses."
Zhang said he expects to "eventually see domestic prices moving in line
with international levels."
(For more biz stories, please visit Industry Updates)
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