Sorry, Sinopec. Beijing’s more concerned wtih inflation, social stability

Recent reports that Sinopec (HKEx: 386; NYSE: SNP) got its employees to make Internet postings in support of fuel price hikes should come as no surprise to anyone, as the company tries desperately to boost its margins and profits by hook or by crook. Market-set fuel prices may be the ultimate goal for everyone involved, but given China’s rampant inflation at the moment I’d be surprised to see any major fuel price hikes anytime soon. The only thing that scares China more than losing money is social instability, which is exactly what Beijing fears if inflation gets too out of hand. Heaven forbid all those consumers who dropped thousands of dollars on new cars over the last couple of year should suddenly find themselves unable to drive them due to high fuel costs!