CRUDE oil costs will remain stable this year despite a slight price rise in the international market, says a top official at one of China's largest oil refineries. Zhenhai Refining and Chemical Co executive director Wang Lisheng estimated that the company's weighted average oil price would be about 940 yuan (about HK$862) per tonne (excluding value-added tax) this year, up slightly from last year's 932 yuan. 'It is a very conservative estimate, as we expect the price will turn out to be lower,' she said. Under China's new policy implemented in May last year, China Petrochemical Corp (Sinopec) determines the weighted average oil price for refineries. The refineries are reimbursed if the crude oil price is higher or they pay a surcharge if the price is lower than the weighted average. Only domestically-sourced or imported crude oil intended for domestic sales are affected by the new measure. Zhenhai plans to process 5.5 million tonnes of crude oil this year, up 10 per cent from last year. A total of 1.02 million tonnes, almost 19 per cent, would be allocated by the state, subject to a 95 yuan surcharge per tonne. A further 4.48 million tonnes would be bought at world prices from imports or offshore oilfields. Of that figure 1.98 million tonnes would be processed for domestic sales, subject to a reimbursement of 150 yuan per tonne by the state. Zhenhai would receive a net reimbursement of 200 million yuan, compared with last year's 160 million yuan, but that covered only eight months. In the first quarter of this year, international crude prices rose between 50 US cents and $1 per barrel. Chairman Zhang Jiaren was optimistic about the company's cost controls, and expected supply to exceed demand by the end of the century. 'The oil producing countries plagued by heavy debts will increase oil supply eventually, so I am confident of the price level,' he said. The company hopes to raise its processing capacity to 15 million tonnes.