SINOPEC LOSES PROFITS DUE TO INTENSE COMPETITION IN THE PETROLEUM PRODUCTS MARKET

Sinopec's profits fell 36% from January to June this year, to 23.75 billion yuan (US$3.3 billion).

The company said it has decided to reduce its annual capital expenditure plan by about 5% due to a 36% decline in profits. It had previously planned to spend 164.3 billion yuan for the year, of which it has already earned 43.8 billion yuan in the first six months, Bloomberg reports.

Sinopec is expected to face a number of challenges in 2025. The company has seen a decline in both gasoline and diesel production. At the same time, the oil refining industry is facing overcapacity and intense competition. Beijing is expected to tighten controls on inefficient refineries.

However, Sinopec expects demand for natural gas and chemicals in China to grow in the second half of the year, while renewable energy sources will continue to compete with refined petroleum products, the publication notes.

Sinopec has set a refining target of 130 million tons for the second half of the year, down from 120 million tons in the first six months. However, the company expects to sell only 89.8 million tons of refined products to the market, down from 112 million tons in the first half.

Profit at the company's main refining unit fell to 2.6 billion yuan from 6.4 billion yuan a year earlier, while its chemicals business posted a loss of 4.5 billion yuan, widening the loss of 3.6 billion yuan a year earlier.