Sinopec... a good bet.

China Petroleum & Chemical Corporation (“Sinopec Corp.”) is the 2nd largest O&G producer with it's principal operations mainly include exploring, developing, producing and trading crude oil and natural gas...Being the third largest refiner and #1 in China it involves in
processing crude oil into refined oil products... trading and transportation as well as distributing and not to forget about marketing refined oil products... it also produce and distribute chemical products too.. current high price in crude oil prices is hurting Sinopec and is already eating into its profits... however its recent report on its Q3 earning is spectacular as the high crude prices has been causing it to bleed profusely since it climbed from $70 to over $90 per barrel... the recent gasoline and diesel price hike by China gov is a inevitable because the need is overwhelming due the shortages in supply...

The asia's biggest refiner has been shouldering huge losses by selling fuel at the regulated below-market prices by Beijing... inflation fear is real but to let the nation crippled due to shortages of supply is unwarranted... but this is not good enough..more needs to be done to increase the output by refiners...

Now that the price hike has happened, the next to follow will be the hike in natural gas prices which is at an obscenely low level...and not to forget that Beijing needs Sinopec to be there and in order for that to happen, they either increase the oil prices further or to pay subsidy to Sinopec as what they have been doing for the last 2 years...

According to reports, some experts do expect it to receive a subsidy for the third year to compensate its losses....Sinopec obtained a $1.2 billion subsidy in 2005 and $640 million last year.
Some are expecting it to be on the range of 2-2.5bil for this year...

In short more relieves will come for Sinopec because there's only a limit to how far the gov can control the supply and demand force... :)

By the way, with the raise, people in China will change their lifestyles soon to energy saving mode and with the change in consumption pattern of the world due to the high oil prices, will eventually drive down the oil prices back... you think about it...