China Petrochemical Corp, the nation's largest oil refiner, has cut production of liquefied petroleum gas and propylene and instead increased output of gasoline to a record to ease fuel supply shortages.

China Petrochemical, known as Sinopec Group, increased its daily gasoline output to 80,000 tons, the Beijing-based oil firm said in its online newsletter Sinopecnews yesterday. Diesel volumes remain "relatively high," it said.

The government this month ordered state-owned Sinopec Group and China National Petroleum Corp to boost fuel supplies to end shortages. Demand has increased since factories reopened after the Lunar New Year holiday and because of reconstruction work prompted by the worst snowstorms in half a century, Bloomberg News said.

Sinopec Group has ordered its refineries to operate at full capacity to cover demand.

Increased fuel production may cause wider losses at Chinese refiners, which are unable to pass on their higher raw material costs because of state controls on gasoline and diesel prices.

The group is the parent of Hong Kong-listed China Petroleum & Chemical Corp.

(Shanghai Daily March 28, 2008)