Sinopec, PetroChina’s profits rise in Q3
Print Edition
China’s two oil majors yesterday reported a big increase in third-quarter earnings as the government’s fuel pricing reform helped their refining margins.
Sinopec, Asia’s top refiner, said net profit rose 20 percent from a year earlier to 22 billion yuan (US$3.6 billion) in the quarter, beating the median estimate of 19.3 billion yuan of eight analysts polled by Bloomberg News.
PetroChina Co’s net profit swelled 19 percent to 29.8 billion yuan.
The two refiners have been enjoying better refining margins after the government in March introduced a new fuel pricing mechanism which reviews prices every 10 working days from the previous 22 days. That helped domestic fuel prices to move more closely with the global crude oil markets.
Sinopec’s refining business generated an operating profit of 6.7 billion yuan in the first three quarters, compared with a loss in the same period a year earlier.
PetroChina said its refining operations reduced losses by 24.7 billion yuan from a year earlier in the January-September period. Still, PetroChina said it had a net loss of 31.7 billion yuan from the sale of imported natural gas to the domestic market in the first three quarters.
This was because the government’s price control has made importing gas a losing proposition. But China’s gas imports have been rising rapidly to meet demand for the cleaner-burning fuel, with PetroChina the largest importer.
Analysts have said the deregulation of gas prices could take longer because the government has to consider wider implications of a price rise such as whether residents could afford more costly gas.
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