Sinopec Parent Boosts Crude Processing, Fuel Imports

China Petrochemical Corp., the nation's biggest oil refiner, will increase crude processing volume in August and boost oil product imports as demand peaks in the summer.

Crude oil refining volume will rise by 890,000 metric tons to 14.23 million tons this month from a year earlier, Beijing- based Sinopec Group, as China Petrochemical is known, said in its online newsletter Sinopecnews today.

School holidays in July and August have prompted more people to take to the roads, boosting demand for gasoline and diesel. Power utilities are expanding electricity output as increased use of air-conditioners in the summer contributes to power shortages in Guangdong, China's manufacturing hub.

"The oil refiner will further cut fuel exports and increase oil products imports to meet domestic demand," Sinopec Group, the parent of Hong Kong-listed China Petroleum & Chemical Corp., said in the newsletter, without elaborating.

China's crude imports surged 39 percent to a record 14.83 million tons in July, the Customs General Administration of China said Aug. 10. Gasoline exports from the world's fastest- growing major economy fell to an eight-month low last month, according to the latest customs data.

"Sinopec Group is running its refineries at maximum capacity to mitigate the tight fuel supply," the company said.

Gasoline and diesel demand may rise 6 percent in the third quarter, CNPC Research Institute of Economics and Technology, a think-tank of the nation's largest oil company, said in a report last month.

Daily Processing

The state-owned refiner is processing 460,000 tons of crude oil every day this month and oil products output will rise by 540,000 tons from a year earlier, it said.

In the first seven months, Sinopec Group's crude refining volume increased by 5.9 percent and output of gasoline, diesel and jet fuel climbed by 5.2 percent, the company said.

Chinese refiners, including Sinopec Group and China National Petroleum Corp., processed 161 million tons, or 7 percent more crude, into fuels in the first half than a year earlier, the National Bureau of Statistics said July 27.

Sinopec Group is facing increasing pressure to meet the company's full-year profit target because of the strong crude oil price, President Su Shulin said in Sinopecnews on July 30.

China controls gasoline, diesel and jet fuel prices to limit their impact on inflation in the world's most-populous nation. New York's benchmark oil prices have gained more than 14 percent this year and reached a record $78.77 a barrel on Aug. 1.