China Petroleum & Chemical Corp., Sinopec, announced a 9.9 per cent decrease in net profit for 2023 on Sunday, according to Reuters. Despite the decline, attributed to falling oil and gas prices, the company saw a recovery in fuel demand. The world's largest oil refiner reported a net income of 60.5 billion yuan ($8.37 billion) according to Chinese accounting standards. Sinopec acknowledged facing a challenging operating environment and intense competition in 2023. This follows a 6.9 per cent decline in net income in 2022, when COVID-19 restrictions impacted fuel and chemical demand. In the post-pandemic period, China experienced a surge in demand for aviation fuel and gasoline due to increased air traffic and personal vehicle usage. This led to a 14.3 per cent rise in gasoline sales, a 6.4 per cent increase in diesel, and a significant 49.5 per cent expansion in aviation fuel sales, as reported by Sinopec. In 2023, refiners, accounting for both domestic sales and exports, enjoyed robust export profits due to the strong growth in overseas shipments of diesel and jet fuel. Sinopec's refinery throughput rose by 6.3 per cent to a record 257.52 million metric tons, or about 5.15 million barrels per day, with a forecasted increase to 260 million tons this year. While Sinopec anticipates a slight decrease in its crude oil production from 280.23 million barrels in 2023 to 279.06 million barrels this year, it expects natural gas production to increase from 1,292 billion cubic feet to 1,380 billion cubic feet. However, the company's petrochemical business saw a 1.8 per cent decline in sales of chemical fibers and plastics. For this year, Sinopec plans capital spending of 173 billion yuan, down from 176.8 billion yuan last year, to cover key investments such as exploration and development.
