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Shanghai: China Petrochemical Corp (Sinopec), the nation's largest oil refiner, has reduced production of liquefied petroleum gas and propylene and instead increased output of gasoline to a record to ease fuel supply shortages.
China Petrochemical, known as Sinopec Group, increased its daily gasoline output to 80,000 tonnes, the Beijing-based oil company said in its online newsletter Sinopecnews yesterday. Diesel volumes remain "relatively high", it said, without elaborating.
The government this month ordered state-owned Sinopec Group and China National Petroleum Corp. to boost fuel supplies to end shortages. Demand has increased since factories reopened after the Lunar New Year holiday and because of reconstruction work prompted by the worst snowstorms in half a century.
Sinopec Group has ordered all its refineries to operate at full capacity to cover demand, it said.
Losses
Increased fuel production may cause wider losses at Chinese refiners, which are unable to pass on their higher raw material costs because of state controls on gasoline and diesel prices. Combined losses at refiners reached 20.6 billion yuan ($2.94 billion) in the first two months of 2008, compared with a profit of 15.6 billion yuan a year earlier, the statistics bureau said yesterday.
Sinopec Group said earlier this week that it is cutting aromatics production to free up raw material to make more gasoline.
The Zhenhai Refinery, the country's biggest, will lose as much as 12 million yuan by reducing its output of the more-valuable chemical, Sinopec Group said on March 24.
Propylene is an oil-based petrochemical, which is used in the production of plastic products including compact discs, laminates and bullet-proof windows.
Aromatics are oil-based chemicals used in making synthetic fibres including polyester and nylon, plastic water bottles and paints. LPG is widely used as a cooking fuel in Asia.
Sinopec Group is the parent of Hong Kong-listed China Petroleum & Chemical Corp.
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