Among the three major state-owned oil giants, Sinopec, the country's largest refiner, stood out from the explosion of net profit in the first three quarters. The third quarterly report shows that Sinopec’s net profit increased by 230.3% year-on-year to reach 49.714 billion yuan. PetroChina and CNOOC both experienced a 20% decline in performance.
The new refined oil pricing mechanism apparently removes obstacles for the refiners' so-called “leapfrogging lossesâ€. The source of profit is mainly the refining and sales segment. Sinopec realized operating revenue of 21.557 billion yuan in the refining segment in the first three quarters of this year. In contrast, the refinery plates of PetroChina and CNOOC, which are more focused on the upstream, are far from achieving such a significant “harvest.â€
But overall, the new mechanism clearly benefits domestic oil companies. According to data released by the National Development and Reform Commission on the operation of the oil and gas industry in the first three quarters of 2009, the refining industry changed from a net loss of 118.2 billion yuan in the same period last year to a net profit of 67.1 billion yuan.
However, the new quarterly report of Sinopec shows that after entering the third quarter, due to the decline in the gross profit of the affected refinery chemicals, the growth rate of Sinopec has slowed down. Zhang Jianhua, senior vice president of Sinopec, revealed at an industry conference in Beijing that the company's refining business in October was in a loss again, mainly because the international oil price soared, while domestic oil prices did not adjust in time.
However, the new round of oil product price adjustment is expected to come again. The increase in international oil prices has already broken through the 4% red line for a long time and has met the necessary conditions for the rise in domestic oil prices. It is therefore only subject to the order of the price control department. In the past week, the wholesale price of refined oil in most regions in China has risen, and state-owned oil companies have begun to reluctantly sell. In Nanchang, Xi’an, Guizhou, Nanjing and other regions, CNPC and Sinopec’s two main units began to control sales, and Chengdu’s two major groups ceased operations.
The new refined oil pricing mechanism apparently removes obstacles for the refiners' so-called “leapfrogging lossesâ€. The source of profit is mainly the refining and sales segment. Sinopec realized operating revenue of 21.557 billion yuan in the refining segment in the first three quarters of this year. In contrast, the refinery plates of PetroChina and CNOOC, which are more focused on the upstream, are far from achieving such a significant “harvest.â€
But overall, the new mechanism clearly benefits domestic oil companies. According to data released by the National Development and Reform Commission on the operation of the oil and gas industry in the first three quarters of 2009, the refining industry changed from a net loss of 118.2 billion yuan in the same period last year to a net profit of 67.1 billion yuan.
However, the new quarterly report of Sinopec shows that after entering the third quarter, due to the decline in the gross profit of the affected refinery chemicals, the growth rate of Sinopec has slowed down. Zhang Jianhua, senior vice president of Sinopec, revealed at an industry conference in Beijing that the company's refining business in October was in a loss again, mainly because the international oil price soared, while domestic oil prices did not adjust in time.
However, the new round of oil product price adjustment is expected to come again. The increase in international oil prices has already broken through the 4% red line for a long time and has met the necessary conditions for the rise in domestic oil prices. It is therefore only subject to the order of the price control department. In the past week, the wholesale price of refined oil in most regions in China has risen, and state-owned oil companies have begun to reluctantly sell. In Nanchang, Xi’an, Guizhou, Nanjing and other regions, CNPC and Sinopec’s two main units began to control sales, and Chengdu’s two major groups ceased operations.
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