Sinopec profits slow on rising costs, price curbs

Growth in profits at China Petroleum & Chemical Corp (Sinopec) slowed to 5.4% in 2007 compared with a 30% gain the previous year, Bloomberg reported. Its profits for the year were US$8.1 billion, coming in below a target US$8.85 billion set by analysts in a Bloomberg poll. A combination of rising raw material costs and fuel price curbs imposed by the Chinese government were blamed for the slower growth. Sinopec was required to purchase refined oil products from local producers at high prices and increase its own output to guarantee supplies, measures which the company said resulted in "serious losses." This was despite the government paying Sinopec US$1.75 billion in subsidies to compensate it for selling fuel below cost.