PetroChina Co Ltd, the country's dominant oil and gas producer, posted a 33 percent fall in third-quarter profit, lagging forecasts, due to lower crude oil prices and losses from its natural gas import business.

Net profit dropped to 24.9 billion yuan ($3.99 billion) in July-September from 37.4 billion yuan a year earlier, the company said in a filing with the Shanghai bourse on Tuesday. That lags an average estimate of 29.2 billion yuan in a Reuters poll of four analysts.

Benchmark Brent crude averaged 2.4 percent lower in the third quarter from a year earlier as the global economy remained tepid, curtailing demand for oil and gas.

PetroChina's exploration and production division posted an operating profit drop of 13 percent to 49.5 billion yuan in the third quarter, according to Reuters calculations.

The company's natural gas and pipeline business booked an operating loss of 715 million yuan versus in July-September, versus a profit of 2.5 billion yuan in the same period last year.

PetroChina has been importing natural gas at crude-linked international prices and selling them at home at a loss because of government price controls aimed at taming inflation. Losses have been expanding due to increases in import volumes.

The state-owned giant has called on Beijing to raise natural gas prices. Reforms to the government's natural gas pricing mechanism are now being tested in Guangdong and Guangxi provinces.

OIL REFINING

PetroChina's third-quarter profit drop was cushioned by an improvement in its refining business, thanks to two hikes in domestic fuel prices in the period.

Operating loss at its refining and chemicals division narrowed to 8.5 billion yuan in July-September, from a loss of 17.4 billion yuan a year earlier.

Chinese refiners cannot fully pass on higher crude costs to users because of government price controls.

Sinopec Corp , Asia's largest refiner, booked an operating profit of 3.0 billion yuan in refining, versus a loss of 9.3 billion yuan in the second quarter and 10.9 billion yuan in July-September of 2011.

The Hong Kong-listed shares of Sinopec and PetroChina have advanced in recent weeks partly on investor hopes that China would accelerate its reform of its fuel pricing soon.

"Eventually China will have to reform both natural gas and fuel products. It is just going to be a gradual process," Scott Darling, head of Asia ex-Japan Oil & Gas Research at Barclays, said ahead of PetroChina's earnings release. "Is it going to happen in the next few weeks? I don't think so."