China Petroleum and Chemical Corp (Sinopec), which reported a 77.3% fall in first-half earnings, said the third quarter could see more profit drops, the South China Morning Post reported. High international crude prices, combined with capped domestic oil product prices, have hit the company’s refining business. "Through preliminary estimation by the finance division, the company expects that net profit for the first three quarters of this year shall drop more than 50% compared with the same period in 2007," Sinopec said in a statement. Analysts say that the government must respond to continued high crude prices by significantly raising fuel prices. Beijing hiked retail diesel and gasoline prices by 17% in June.
For more on the previous price hikes, please see this report from our June issue.