CHINA Petroleum & Chemical Corp., Asia’s biggest oil refiner, said yesterday first-quarter profit fell 69 percent because of higher crude oil costs and State-imposed ceilings on fuel prices.

Net income dropped to 6.06 billion yuan (US$865 million), or 0.043 yuan a share, from a revised 19.61 billion yuan, or 0.226 yuan, a year earlier, the Beijing-based company, known as Sinopec, said in a statement. Sales rose to 332 billion yuan from 277 billion yuan.

Sinopec couldn’t raise the prices of its products to pass on higher raw material costs because of government caps on fuel prices aimed at containing inflation. Benchmark crude in New York averaged almost 70 percent higher in the first quarter than a year earlier. Sinopec warned April 20 that profit would drop by more than 50 percent.

“Downstream, price caps have seriously hit refiners such as Sinopec,’’ Michael Yuk, an oil analyst at Sun Hung Kai Financial, said in a research note April 22. “Sinopec still needs crude oil to drop to US$76 a barrel to break even in product refining.’’

The refiner would receive “an appropriate subsidy’’ from the government starting this month to compensate for losses on processing oil, Sinopec said April 20. To aid Sinopec and PetroChina Co., which also refines oil products, the government will refund value-added taxes on 3.5 million metric tons of fuel imported by their parent companies in the second quarter.

The government last month paid Sinopec 12.3 billion yuan in subsidies to compensate for selling gasoline and diesel below cost. The refiner will book 4.9 billion yuan of the funds in its 2007 accounts and the rest in the first quarter of 2008, it said March 19. (SD-Agencies)