Chinese Oil Refineries Post Loss of $21.8 Billion

By Wang Ying

Feb. 3 (Bloomberg) -- China’s oil refineries posted a loss of 149.3 billion yuan ($22 billion) in the first 11 months of last year because of higher raw material costs, the government said.

China faced an energy shortage in the first half though supplies became ample in the second half as the economy slowed, the Ministry of Industry and Information Technology said in a statement on its Web site yesterday.

The Chinese government controls fuel prices to limit their impact on inflation. China Petroleum & Chemical Corp., Asia’s biggest refiner, said last month that it expects 2008 profit to drop more than 50 percent because of higher crude oil costs in the first six months.

China’s oil and gas explorers, led by PetroChina Co., had a profit of 456.6 billion yuan in the first 11 months of last year, the ministry said. The country’s coal-fired power plants had a net loss of 39.2 billion yuan.

The coal industry earned 200 billion yuan between January and November, it said.

In December, the country’s oil-processing volume fell 7.4 percent to 27.16 million metric tons as the economic slowdown sapped demand, the biggest drop since at least 2003, according to the China Mainland Marketing Research Co., which compiles data for the National Bureau of Statistics in Beijing.

Oil refining in 2008 rose 3.7 percent to 342 million tons, compared with a 6.4 percent expansion in 2007, according to China Mainland Marketing.

To contact the reporter on this story: Wang Ying in Beijing at ywang30@bloomberg.net.