Sinopec says crude tax rebate barely covers loss

BEIJING, May 26 (Reuters) - Top Asian oil refiner Sinopec Corp (0386.HK)(SNP.N) is still reeling from refining losses despite a government tax incentive, its chairman said on Monday, as global crude prices have charged above $130 a barrel.

Prolonged losses could force refiners to curb production, resulting in fuel shortages in the world's second-largest oil consumer, a prospect Beijing is loath to see as the Olympic Games is just two months away.

"The (crude tax) rebate cannot cover all of our losses," Chairman Su Shulin told reporters at the sidelines of the company's shareholder meeting.

Su said China's diesel market would tighten in coming months as seasonal demand kicks in from farming, on top of the need to stockpile ahead of the Olympics, which has seen the state oil firm raising diesel imports to near record rates.

The government started rebating -- 75 percent of the 17 percent value-added tax for crude oil imports -- to the company from April, Su said, confirming an earlier Reuters report.

Beijing is also refunding the full amount of value-added tax levied on importing gasoline and diesel, a policy started last December and later extended to last through June.

Chen Ge, Sinopec's board secretary, said earlier on Monday that the company was losing 3,000 yuan for each tonne of gasoline and diesel that it produces, as it's squeezed between record crude costs and frozen domestic fuel prices last changed 7 months ago.

Chen did not specify if the estimated loss was before or after the tax rebates.

($=6.937 yuan)

(Reporting by Jim Bai, writing by Chen Aizhu; editing by Anne Marie Roantree)

(aizhu.chen@thomsonreuters.com; Reuters Messaging: aizhu.chen.reuters.com@reuters.net; +8610 6627 1211)