(Yicai Global) Feb. 5 -- China’s petroleum and chemical industry recorded a large drop in profit last year as the world’s second largest petrochemicals producer was battered by the economic impact of the Covid-19 pandemic and low oil prices, Xinhua News Agency reported today.

Profit in the country’s petroleum and chemical industry slumped 13.5 percent last year from the year before to CNY515.6 billion (USD79.6 billion), according to statistics released by the China Petroleum and Chemical Industry Federation yesterday. Its profit rate declined to 4.65 percent, the lowest in the last 20 years. Revenue was down 8.7 percent to CNY11.1 trillion (USD1.7 trillion).

Profit from oil and gas extraction tanked 82.3 percent year on year while that from oil refining dropped by 45.6 percent, far lower than the industry’s average, said Secretary General Zhu Fang. The chemical industry fared better with a 25.4 percent surge in profit, more than the sector’s average.

Although the price of major petrochemical products fell by 6.4 percent last year, production and sales kept their upward trend, said Fu Xiangsheng, deputy head of the federation.

Crude oil output rose 1.6 percent from 2019 to 195 million tons, while demand for the black gold jumped 5.6 percent to 736 million tons. The yield of natural gases soared 9.8 percent and consumption leapt 7.3 percent. Production of other major chemical products surged by between 3.6 percent and 4.6 percent.

As the world’s biggest chemical products supplier, China’s chemical industry will hopefully continue to grow despite the uncertainties about the pandemic and the world economy, Fu said.

Industry giants, especially those in the sectors of chemical fertilizers, chloro-alkaline and sodium carbonate products, calcium carbide and oil refining, should focus on eliminating overcapacity, Fu added.

Editor: Kim Taylor