The country's two biggest oil companies have not asked the government to raise prices of their refined products as reported by some media, a senior planning official said yesterday.

 

"We haven't received any application from Sinopec or China National Petroleum Corp to raise prices of finished oil products in response to rising global crude prices," Bi Jingquan, vice-minister of the National Development and Reform Commission, said.

 

The two refineries had made profits in the January-July period, he told a press conference in Beijing.

 

Zhang Zhiguo, a senior media manager with Sinopec, told China Daily yesterday that his company began to lose money in June, but the losses have not yet offset the profits made this year through May.

 

Analysts said that any hikes in refined oil prices would further push up inflation, which has risen largely because of food prices.

 

Bi said the government will continue to reform the pricing system for oil products.

 

"China's crude prices have been linked to international markets, and we will reform finished oil product prices based upon that - that is the direction."

 

Price revisions will take into account international oil prices and affordability of all aspects of society, he said.

 

The official said the commission had asked the two oil giants to increase production and imports to ensure supply in Fujian and Heilongjiang provinces, which suffered oil shortages last month.

 

Overall, the country's oil demand and supply is balanced and the market is stable, he said.

 

(China Daily September 5, 2007)