China Petrochemical Corp., Asia 's top refiner by capacity, said Tuesday that it has halted oil product exports to ensure domestic supplies at a time of robust local fuel demand.

"Though exporting oil product exports makes good profits, we have suspended exports to regions other than Hong Kong and Macau ," Sinopec Group, as the company is known, said on its website.

Chinese refiners can make CNY1,200 for each ton of diesel they export and CNY1,000/ton for gasoline, as local fuel prices are controlled by the government as part of its anti-inflation measures, according to domestic energy consultancy C1 Energy.

Sinopec did not say in its announcement whether or not selling oil products into the home market is profitable now, or how much refined oil it will be holding back from international markets.

The halt is not expected to have much impact on regional fuel markets, as Sinopec exports only limited amounts of gasoline and high-sulfur diesel, to Vietnam and Indonesia , some Singapore-based traders said.

"They exported only one-two gasoil cargoes of medium-range size per month...and even less gasoline," said one of them.

China raised average gasoline and diesel retail ceiling benchmarks by around 5% on April 7, but analysts have said refining margins of Chinese refiners are still in red as the fuel price increase significantly lagged gains in international crude prices.

"Our estimates were that Chinese refiners were losing about $4 a barrel following the last price hike," said Alex Yap with Facts Global Energy in Singapore .

"The real issue is how to ensure refinery runs and product supply despite the unprofitable pricing. Curbing exports would stop stocks exiting into the regional market, but won't really help domestic supply," Yap said.

Sinopec Group plans to raise April oil product output by 4% from a year earlier to 10.54 million metric tons, by asking its refineries to run at full capacity and reducing petrochemical output, the company said.

The company produced 31.55 million tons of oil products in the first three months of 2011, up 6.2% from a year earlier, it said.

Another factor is that in March, China refineries reduced their daily processing rates by 3.4% versus February levels, due to maintenance at some large refineries.

China 's apparent oil product use in March climbed to a record high of 21.73 million tons as more cars hit the road in warmer weather, industrial use recovered and agricultural demand rose as well due to spring planting, the National Development and Reform Commission said Monday.

Oil product stocks had fallen in March after hitting record high levels at the end of February, the NDRC said.

Another element at play is that the local gasoline market has been seeing some tightness following a diesel supply squeeze last year--efforts by Chinese refiners to maximize diesel output at the expense of gasoline production then resulted in a drawdown in gasoline stocks.

Recent data on China 's exports of refined products isn't available--official figures on March exports are due to be released Thursday.

In February, the largest single export category was fuel oil, with some 940,000 tons exported, followed by gasoline, at close to 400,000 tons.

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