Sinopec posted a net profit of 71.7 billion yuan for 2011, after a weak fourth quarter reduced growth from 2010 to 1.4 percent, Beijing News reported.

The refining operations made a 37.6 billion yuan loss for the year.

Prices for refined products have been hiked twice since January, with the increases totaling 900 yuan per ton.

Sinpoec is still making a loss on its refining business, chairman Fu Chengyu (傅成玉) told journalists in Hong Kong. He noted that domestic oil prices aren't growing as fast as global prices.

The National Development and Reform Commission (NDRC) recently submitted proposals for a new mechanism for pricing oil products, and the commission has said that the changes will be introduced when appropriate.

The policymakers' intention is that prices should be adjusted every fortnight instead of every 22 days.

However, people are also speculating that the government wants to give the two major oil companies a bigger say in setting prices.

Fu told the journalists that this issue hasn't been discussed, but that the reforms will tend towards letting the market determine the price of refined products.