China plans to trim cheap crude oil state allocations to some Hong Kong-listed mainland petrochemical firms, as it moves to align the sector with the international market, analysts and company officials say. The latest bi-weekly China report by Credit Lyonnais Securities Asia says the Chinese government is expected to cut Shanghai Petrochemical Co's allocation by a minimum of 11 per cent this year. Since the company was listed in Hong Kong in 1993 it has received an annual state-priced crude allocation, at lower-than market prices, of 4.5 million tonnes a year, satisfying about 90 per cent of its crude oil requirements. After a request from the Hong Kong stock exchange, Shanghai Petrochemical is expected to make an announcement shortly to clarify how the policy change will affect its operations. Shanghai Petrochemical spokesman Cai Hongping said the company had not yet been notified how much would be cut, but he admitted the trend was for the state to slash cheaper crude allocation quotas. Jilin Chemical industrial Co official Wang Delin said the company had received 2.93 million tonnes of state crude this year, the same as last year. This year, it plans to process 3.8 million tonnes of crude, up from last year's 3.36 million tonnes. Mr Wang said the company would face a weighted average crude cost of about 1,100 yuan (about HK$1,023) a tonne this year, compared with last year's 1,050 yuan, because of the higher prices of state-allocated crude and its purchase of more crude at market prices. Zhenhai Refining & Chemical Co director Chen Hongzhan said he had not yet been informed of the allocation quota change but he expected the impact on the company to be minimal. Last year, the company bought 80 per cent of its crude on the international market with the balance allocated by the state. 'We've been buying crude oil in on the international market since for a long time because we have been expecting the government to reduce the state crude allocation,' Mr Chen said. The three stocks reacted quietly yesterday. Shanghai Petrochemical slipped five cents to $2.15, while Zhenhai at $3 and Jilin Chemical at $1.13 were unchanged.