Asia’s largest refiner, China Petroleum & Chemical Corp., may post figures of an extended fall in their profit from making diesel and gasoline as the company is prevented from raising its crude oil costs for consumers by government price control.  

With crude oil costs increasing by eighty four percent in the first six months oil processing margins fell by forty five percent, as reported by Sinopec in its earnings statement released by the company yesterday.  

The stock has fallen the most in almost two months as the company saw a drop of ten percent in its second quarter net income. Sinopec also saw an increase of forty percent in its net income in the preceding three months.  

To lower inflation China takes controls of fuel prices and the price of fuels have been raised once this year as compared to five hikes in the year of 2009. Sinopec to compensate for the loss might go for acquisition of gas and oil fields so that the company which is based in Beijing does not have to rely solely on refining.  

According to Wang Aochao an analyst based in Shanghai, working in UOB-Kay Hian Ltd, this kind of pressure will be seen in margins of the company in the third quarter also if the refined oil product prices do not increase.    

He added saying that Sinopec in all possibility would purchase more oilfield assets to increase its earnings and thus it can compensate for the losses springing out from government restrictions put on refining business.  

In the month of March Sinopec agreed to purchase shares of an Angolan field from China Petrochemical Corp. worth two decimal five billion dollars for diversifying its business and for expansion of its crude reserves.