Top Asian oil refiner Sinopec Q1 net down 69 percent

Vehicles queue for diesel at a Sinopec gas station in Hefei, Anhui province, China, March 30, 2008.

HONG KONG (Reuters) - Top Asian oil refiner Sinopec Corp (0386.HK)(SNP.N) posted a 69 percent fall in first-quarter net profit, lagging forecasts as soaring crude oil prices pushed its refining business into a deep loss.

In a statement on Sunday Sinopec said it had made a net profit of 6.06 billion yuan ($865 million) in the three months ended March, versus a slightly revised 19.6 billion a year earlier.

The result fell short of a consensus forecast 8.28 billion yuan from five analysts polled by Reuters.

Sinopec said it had taken multiple measures to enhance oil product output to secure supply to the domestic market, even as domestic prices of oil products turned out lower than crude prices.

"These measures have worked out salient results, but have also given rise to relatively big loss in the refining segment," it said.

Crude oil prices CLc1 jumped above $100 per barrel in January and hit a record near $120 this month on tight supply, geopolitical concerns and a weak dollar.

State-run Sinopec (600028.SS) and top Asia oil producer PetroChina (0857.HK)(PTR.N)(601857.SS) have found themselves squeezed between skyrocketing crude prices and government-set product prices, but operate under the obligation to supply the world's largest oil consumer after the United States.

Sinopec has said it won a 7.4 billion yuan government bailout to cover losses in the first three months.

The oil company said earlier this month it would start receiving a government subsidy every month against losses due to processing imported crude, starting from April.

Analysts say the subsidy will most likely come in the form of a 75 percent rebate on the 17 percent value-added taxes now slapped on crude imports.

Beijing will also refund the full amount of value-added taxes levied on imported oil products paid in the second quarter of this year.

Shares in Sinopec fell 43 percent in January through March versus an 18 percent fall in the benchmark Hang Seng Index .HSI on concern over the outlook for its refining business.

Sinopec trades at 8.4 times forecast earnings, versus PetroChina's 12, Exxon Mobil's (XOM.N) 11 and BP's (BP.L) 10, according to Reuters data.

(Editing by David Holmes)