Sinopec, PetroChina to receive monthly government subsidy

China Petroleum and Chemical Corp(Sinopec)<600028><386>, also known as Sinopec, and PetroChina<601857><857> will be granted monthly subsidy from the Ministry of Finance, a move to compensate for their losses from processing expensive imported crude oil and encourage the refinery business to ensure the domestic supply.

Sinopec received subsidies from the Chinese government for more than three years, while it is the first time for PetroChina to get such financial backing. The detailed figures of the subsidy were not available yet.

It is also estimated that Sinopec may benefit more from the subsidy than PetroChina, since 80% of its crude oil needs come from imports. Sinopec reported a loss of RMB 13.7 billion from its refineries last year due to the surging oil price in the global market in the last quarter of the year.

Earlier this month, the two companies have also been granted rebates on the value-added tax for their imports of gasoline and diesel from April to June this year.