By Bloomberg News
July 15 (Bloomberg) -- PetroChina Co., the world’s largest company by market value, increased its refining profit to a record in the first half after the government’s revised fuel pricing mechanism allowed refiners to pass on rising costs.
“Even though the impact of the financial crisis reduced the processing volume and the operating rates at our refineries, PetroChina’s refining and chemical subsidiary achieved remarkable performance in the first half,” parent company China National Petroleum Corp. said in a statement posted on its Web site today. The refining profit was PetroChina’s highest since its listing in 2000, it said.
China, the world’s third-largest economy, raised its domestic gasoline and diesel prices three times this year under a revised pricing formula that takes into account the cost of crude oil, taxes and an “appropriate profit” for refiners. Benchmark crude oil in New York has gained 34 percent since the start of the year.
“The company’s refining margins on a barrel of oil are very strong now,” said Wang Aochao, an analyst at UOB-Kay Hian Ltd. in Shanghai. “I’m very bullish on the company. I can see it increasing profit in the coming quarters.”
PetroChina boosted the imports of high-sulfur crude oil at its Dalian refinery to trim costs, China National said today.
China’s second-biggest refiner increased the production of gasoline and cut diesel output because of a “noticeable decline” in diesel demand and a shortage of gasoline supplies in the first quarter, China National said.
PetroChina made a profit 53.6 billion yuan ($7.8 billion) in the first half of last year.
China Petroleum & Chemical Corp. is the nation’s biggest refiner.
-- Wang Ying. With assistance from John Duce in Hong Kong. Editors: Ang Bee Lin, Jane Lee.
To contact the Bloomberg News staff on this story: Ying Wang in Beijing at ywang30@bloomberg.net
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