Sinopec denies seeking change to oil price system -paper

BEIJING Aug 3 (Reuters) - State-owned Sinopec Group, China's leading oil and gas company, denied reports on Monday that it was seeking changes in the oil pricing mechanism, which it said allows speculators to anticipate official price changes.

The official China National Radio (CNR) reported on Sunday that Sinopec Group was in discussions with peer oil firm CNPC and the top economic planner to fine-tune the new oil pricing mechanism, which was put in place in January.

"The current oil pricing mechanism is too simple and transparent, which often leads to speculation and product hoarding. This is not good for a stable oil market order," CNR said, summing up the opinions of unnamed CNPC and Sinopec sources.

However, Huang Wensheng, spokesman Sinopec Group, parent of Sinopec Corp (0386.HK) (600028.SS), told the local Beijing Times that his company had never expressed such views.

"The new pricing mechanism was officially announced in May after soliciting public opinion early this year and several oil price changes were carried out under the system. Do you think the government will adjust the mechanism at this particular time?" Huang was quoted by the paper as saying.

The National Development and Reform Commission (NDRC) announced in May that China would adjust fuel prices when global crude prices move more than 4 percent from their moving average over 22 working days.

It also said refiners would enjoy "normal" profits when crude was under $80 per barrel, with tighter margins when crude rose above $80.

The mechanism is highly predictable and therefore speculators can easily run ahead of policymakers by calculating when and how much China should adjust its domestic oil prices, CNR said, citing company sources.

The radio also said that CNPC and Sinopec suggested the authorities replace specific global price changes with a range, such as 4-10 percent, as the pre-condition for adjustments to domestic retail fuel prices.

Measures should also be taken to blur the new oil pricing mechanism, including the formula to calculate global crude prices, the CNR report added.

State media have reported that China takes the weighted average of a basket of Brent, Dubai and Minas blends of crude oil as a reference to calculate the global crude price.

CNR cited sources from the top two oil firms as saying that other prices, including those in Europe, and other factors such as foreign exchange rates and trade tariffs should also be considered in determining the global reference price.

NDRC, China's top economic planner, said in a separate statement on Monday that it will continue to enforce the fuel pricing mechanism approved by the State Council despite various problems and conflicts.

The commission did not elaborate on the problems and conflicts.

"Revalent policies need improvements, but we can only resolve various problems through further reforms," it said in the statement published on its website on Monday (www.ndrc.gov.cn) to summarise the latest developments in energy price reforms.

"We will appropriately control refined oil prices and adjust them at suitable times ..." it added. (Reporting by Eadie Chen and Chen Aizhu; Editing by Ken Wills) (eadie.chen@reuters.com; +8610 6627 1268; Reuters Messaging: eadie.chen.reuters.com@reuters.net))