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Rising Oil Prices "Strangle" Sinopec

One of the main petroleum companies in China, Sinopec, or the China Petroleum and Chemical Corporation, forecasted its net profit to decrease by more than 50 percent in the first quarter of 2008 from a year earlier

One of the main petroleum companies in China, Sinopec, or the China Petroleum and Chemical Corporation, forecasted its net profit to decrease by more than 50 percent in the first quarter of 2008 from a year earlier.

The company did not say in details how much it earned in the first three months, according to its prior estimation.

The company said the continuous rise of crude oil price on the global market and domestic price controls led to big losses in refining business and squeezed profit margins.

The company's share price, which plunged 7.54 percent on Friday, has fallen more than 55 percent since the start of the year. Analysts said investors were pessimistic about the future profitability of oil refiners amid high crude prices.

The Ministry of Finance proposed early this week a tax rebate to oil companies to limit their refining losses.