Sinopec warns of sharp profit decline

China Petroleum & Chemical Corp (Sinopec) warned that surging oil prices could mean a sharp decline in profits or a net loss for the first half of 2008, the South China Morning Post reported. The company said that its net profits for the first half would fall more than 50% year-on-year. While international crude futures have risen 40% so far this year, Beijing has only raised retail rates of fuel once, when it increased the price of diesel and gasoline on June 19 by 18% and 17%, respectively. Sinopec’s projected profit drop comes despite gains from crude oil sales and government subsidies, as significant refining losses outweigh profits from other divisions. The company posted a 69% drop in first-quarter profits in April.