Capped prices see oil refining losses

China's oil refining industry recorded a US$3.7 billion loss in 2005, the National Development Reform Commission has announced as reported by state media. The loss, which came on the back of a US$2.6 billion profit in 2004, has been blamed on a combination of high global crude oil prices and restricted oil product prices in the domestic market. The government is believed to be considering price reform in the wake of persistent lobbying by producers and gasoline shortages in some regions as smaller refiners balked at boosting output while profit margins are so small. The NDRC report also warned of supply problems, with refining capacity increasing just 4.5% in 2005 to 328 million tons.