PetroChina Co managed to eke out a 1 percent gain in first-half net earnings as higher oil prices and output offset the losses in the company's refining and gas import business.

Net profit in the first six months of this year totaled 66 billion yuan (US$10.3 billion), or 0.36 yuan per share, versus 65.3 billion yuan a year earlier, China's largest oil and gas producer said yesterday. The profit missed a 68.33 billion yuan estimate from nine analysts polled by Reuters.

"Higher refining and natural gas losses, increased costs and higher effective tax rates were the main reasons for the miss," said Neil Beveridge, an analyst at Sanford C. Bernstein & Co.

PetroChina, which benefited from higher crude prices in its upstream business, its chief earnings contributor, lost 21 billion yuan in its refining and chemicals segment in the first half as hikes in state-controlled fuel prices lagged behind gains in crude costs.

China doesn't allow gasoline and diesel prices to float freely because of inflation concerns.

"The government further tightened its control over the prices of refined products," PetroChina said.

The firm processed 491.4 million barrels of crude oil in the first half, up 11.9 percent on an annual basis, to meet demand.

PetroChina's crude oil output rose 5 percent in the period, the largest increase in recent years, and its natural gas output gained 5.3 percent.

Its gas import business makes a loss due to a gap between higher global prices and regulated domestic prices.