Sinopec receives US$1.7 bln government subsidies

China Petroleum & Chemical Corp (Sinopec)<600028><386>, announced today that it has got RMB 12.3 billion (US$1.7 billion) government subsidies to offset its refining losses resulting from the surging global crude oil pries.

Sinopec said to the Hong Kong Stock Exchange that it would book RMB 4.9 billion of the total in its 2007 accounts, and RMB 7.4 billion in the first quarter of 2008.

Light, sweet crude for April delivery dropped US$4.94 to US$104.48 a barrel on the New York Mercantile Exchange yesterday. On Monday, the oil price breached US$111.42 a barrel after the trading in New York.

The Chinese oil refiners cannot raise product prices without government approval. To guarantee the supplies for the domestic market, Sinopec and its subsidiaries had to buy refined oil products at higher prices from local producers and enhance refined oil production, which led to the big losses to the nation's largest oil refiner.

Its A-shares closed at RMB 14.16 today, up 2.98% or RMB 0.41.