Sinopec profit rises as fuel price controls eased

HONG KONG (AP) State-owned oil company Sinopec said quarterly profit rose 20 percent following the relaxation of Chinese fuel price controls.

Beijing-based Sinopec said Tuesday that profit for the July-September period rose to 22 billion yuan ($3.6 billion) over a year earlier. Revenue rose 7 percent to 724.7 billion yuan.

Two of China's biggest state-owned oil companies are benefiting from higher refining margins after authorities earlier this year loosened price controls. PetroChina said Tuesday that quarterly profit rose 19 percent for similar reasons.

Domestic prices are now allowed to more closely follow international levels. The controls were aimed at keeping politically sensitive fuel prices in check but sometimes left refiners with big losses.

The Chinese government "further improved the pricing mechanism for oil products," which contributed to a "good operating result," the company said in a statement.

Sinopec, also known as China Petroleum & Chemical Corp., said its refining division reported a 6.4 billion yuan profit for the first nine months of the year compared with a loss of 16.5 billion yuan the year before.

Oil production rose 4 percent to about 250 million barrels in the January-September period. Natural gas production rose 11 percent to 486 billion cubic feet.