Sinopec stops on shortages, exports of fuel as refiners therefore loss

April 19, 2011, 12: 49 am EDT by Bloomberg News

(Adds analyst comments in the fourth paragraph).

April 19 (Bloomberg)--China petrochemical Corp., more great refiner of oil in Asia, interrupted exports of fuel to facilitate domestic deficits as high costs and gross price ceilings cause refiners to cut back on production.Sinopec Group, that the company is known, "ceased export to other regions outside of support needs fundamental resources of Hong Kong and Macau," he said in its newsletter online now. The company based in Beijing run its refineries at full capacity and reduce petrochemical production to increase production of gasoline and diesel fuel for domestic use, he said.China fuel inventories fell last month that consumption rose to a record on request for travel, manufacturing and the planting of spring. "Prices increased an average 10 percent this year, according to Bloomberg calculations, while the world of crude oil rose by 17%.Private refineries are not earning money because of the price of fuels controlled and cost gross high, so that they have to reduce production, "Qiu Xiaofeng, an analyst with the Galaxy, based in Beijing Securities Co., said by telephone." "State refiners have to intervene to fill production losses." Private refineries account for more than 10% of the total production of fuel from China, he said. "Pressure growth"China has"a lack of resources and increasing pressure on supply in fuel,"Sinopec group says, without developing.Crude rose above $111 in New York for the first time in 30 months April 8 that the fight against the Libya and unrest in the Middle East spurred concerns of supply. 106.59 Gross was $ US per barrel in electronic commerce at 11: 23 hour Singapore. controls of China retail rates of fuel to curb the rise in consumer prices, which was 5.4 per cent last monththe highest since 2008. "Refineries always make a loss of $2 per barrel after the price of gasoline increases on 7 April and on 20 February, according to JPMorgan Chase & Co. based on a mechanism presented in December 2008, the Government may adjust the fuel retail prices when gross of more than 4 per cent change costs more than 22 working days".Shortages were worse when the Government did not adjust the prices of fuel based on the new mechanism, "Deng Yusong, Director of market research of the economy Department of the State Council Research Center, told a Conference in Shanghai today." "If fuel price mechanism is not strictly applied, then we cannot exclude the possibility of shortages still."Sinopec group plans to increase production of fuel from 4% in April-first million metric tonnes, according to the newsletter. Output rose 6.2% to 31.55 million tonnes in the first quarter, he said. Gross processing volume rose 7.4% to 54.72 million tonnes during the period.The parent of listed in Hong Kong China Petroleum & Chemical Corp. said it will reduce the petrochemical output and use alternative materials, including a liquefied petroleum gas to divert more naphtha to the production of gasoline.

-Wang Ying and Chua Baizhen in Beijing, Winnie Zhu in Shanghai.

To contact the reporter on this story: Ying Wang to Beijing to ywang30@bloomberg.net

To contact the editor responsible for this story: Amit Prakash to aprakash1@bloomberg.net.

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