H share Shanghai Petrochemical plans to further boost crude oil imports this year to capitalise on the sharply reduced international oil price. Company spokesman Lian Xiaolu said it would raise crude imports to almost a third of the amount it would process, compared with a quarter last year. The firm planned to refine more than five million tonnes of crude this year, up from 4.8 million tonnes last year. Mainland refineries and petrochemical firms are facing double challenges - high domestic crude prices but low product prices. As a result of the regional financial turmoil, international crude prices were plunging, pushing down petroleum and petrochemical product prices. However, the state-controlled domestic crude price had not been cut to reflect the lower international levels. Another H share, Zhenhai Refining and Chemical, planned to buy all its crude oil requirement from overseas this year. Last year, it imported 86 per cent of requirements. Jilin Chemical Industrial general manager Lu Qirong also complained last week about the high domestic crude price, one of the key factors eating into the company's profitability. Mr Lian said despite the cheaper international crude cost, Shanghai Petrochemical would continue to source domestic crude because of the company's product structure and technological specifications of its manufacturing facilities. In January, China Petrochemical (Sinopec) abolished the surcharge and reimbursement system for imported crude, allowing refineries to take advantage of the global price fall. 'It will remove a cost on the refineries,' Mr Lian said. Under the policy implemented in 1994, Sinopec determined the weighted average oil price for refineries. Refineries were reimbursed if the imported crude price was higher, or paid a surcharge if the price was less than the weighted average. As the mainland restructures the oil and petrochemical industry by forming two fully integrated groups, it is expected it will provide a chance for the state to slash the domestic crude prices.