China: PetroChina & Sinopec Shares Fall on Fuel Price Cut
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Thursday, 01 October 2009 |
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China cut both standard fuel and diesel prices by CNY190 a metric ton,
effective Wednesday, the National Development and Reform Commission
said. It was the seventh fuel price adjustment since the government
introduced a fuel pricing mechanism Jan. 1 that linked domestic rates
to international crude prices.
The adjustment represents a cut of 2.5% to the average price cap for
fuel of CNY7,610/ton and 2.8% to the average cap for diesel of
CNY6,870/ton, according to Newswires calculations. Noumra analyst Cheng
Khoo said the price cut came two days earlier than expected because the
NDRC wanted to announce the price adjustment before the public holiday
from Oct. 1 to Oct. 8. She said she expects Sinopec to report a
refining margin loss of US$1.1 a barrel in October because of the price
cut, compared with a profit of US$2.9/bbl in the third quarter.
Bank of Communications International said it expects PetroChina's
earnings per share in the fourth quarter to drop by CNY0.013 and
Sinopec's by CNY0.01 due to the latest price cut. Under China's oil
product pricing mechanism, domestic fuel prices may be adjusted when
the moving average of a basket of international crudes changes more
than 4% over a period of 22 working days.
PetrolWorld 300909
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