Asia's largest refiner Sinopec said its net profit for the first half year would decrease by over 50 percent from a year earlier, as it saw big losses in its oil refining business.

In the first half of 2007, Sinopec's net profit was 34.93 billion yuan.

"The gap between the high crude price on the international market and the relatively low price of refined oil products domestically has put the company's refining business in deeply red," the company said in a statement.

Chen Ge, Sinopec's board secretary, said earlier that Sinopec lost about 3,000 yuan for each ton of production, due to the sharp gap in oil prices on world and domestic markets.

The company incurred a loss of more than 20 billion yuan in its refining business in the first quarter of this year.

Sinopec in April got 7.1 billion yuan in subsidies. In March, it got an even bigger subsidy of 12.3 billion yuan, of which 4.9 billion yuan was considered as 2007 earnings and 7.4 billion yuan as first-quarter income.

"We estimate that Sinopec's net profit in the first half year would see a 70 percent decrease," said Liu Gu, an analyst with Guotai Jun'an Securities.

Sinopec processed 84.25 million tons of crude in the first half year, an increase of 6.73 percent from a year earlier. The company produced 13.78 million tons of gasoline and 33.8 million tons of diesel in the first six months.

It reported output of 147.38 million barrels of crude oil in the first six months.

Prices of gasoline and diesel are still controlled by the government. In June the government raised the price of gasoline and diesel by 1,000 yuan per ton. Analysts said the price rise would help domestic oil companies tide over the difficulties to some extent.