Sinopec starts subsidizing refineries for product exports

Sinopec Corp. started subsidizing its affiliated refineries to export products in February, in a move aimed at addressing weak demand in the domestic market and mounting pressure of high inventory build-up, a south China-based Sinopec refinery source said. Sinopec pays out about 130 yuan (US$19) per metric ton in subsidies to refineries that export products such as gasoline and gasoil, the source said. According to the source, Sinopec’s refineries currently incur losses of about 400-500 yuan (US$58-US$73) per metric ton for any products they export. The refinery source did not give further details on the time frame that the Chinese state-owned oil company plans to continue its export subsidy arrangement. (March 5, 2010)