omniture

Longwei Petroleum Expects Higher Fiscal Third Quarter and Fiscal Year Revenues and Margins as a Result of China's April 2010 Fuel Price Increase

Revenue, gross profit and net profit each expected to rise as a result of this one-time pricing adjustment during the fiscal third quarter by approximately $3.4 million

TAIYUAN CITY, China, April 19 /PRNewswire-Asia/ -- Longwei Petroleum Investment Holding Ltd. (OTC Bulletin Board: LPIH), a leading oil and fuel wholesaler and distributor operating in Shanxi Province, China, today announced that it expects to generate an additional $3.4 million each in revenue, gross profit and net profit from its current gasoline and diesel inventories and a corresponding increase in both gross profit and net profit from the sale of current inventory of approximately 5 percent as a result of the latest Chinese government mandate to raise the benchmark retail price of diesel oil and gasoline.

The National Development and Reform Commission (NDRC) announced last Tuesday it would raise prices of gasoline and diesel both by 320 yuan (46.88 U.S. dollars) per ton from April 14, 2010. The price rises translates into mark-ups of 0.24 yuan for gasoline and 0.27 yuan for diesel per liter, the measurement used at service stations in China. This is the first such move in 2010.

International crude oil prices have been rising since March, reaching 87 U.S. dollars per barrel on April 6, the highest price for the last 18 months. At the start of 2009 China adopted a new oil pricing mechanism that allows the NDRC to adjust retail fuel prices when the international crude oil price changes more than four percent over 22 straight working days. The last adjustment occurred on November 10, 2009. The decision was also made based on domestic economic conditions, market demand and supply and oil consumers' ability to shoulder price rises, according to the valuation institution officer of NDRC.

Cai Yongjun, chief executive officer of Longwei Petroleum, commented: "Longwei has been increasing its gasoline and diesel inventory over the past several months in anticipation of this increase in pricing. We are pleased to report this important event, which is a one-time increase in our projected net profits for the 2010 fiscal year of 16 percent. As of the date of the price increase Longwei had a total of 34,126 metric tons of gasoline inventory and 35,544 metric tons of diesel inventory."

About Longwei Petroleum Investment Holding Limited

Longwei Petroleum Investment Holding, Limited (http://www.longweipetroleum.com ) is an energy company that, through its subsidiaries, engages in oil and gas operations in the People's Republic of China ("PRC"). Oil and gas operations consist of transporting, marketing and selling finished petroleum products. The Company's headquarters and primary facilities are located in Taiyuan City, Shanxi Province ("Shanxi"). The Company's second facility is located in Gujiao, Shanxi. The Company purchases diesel, gasoline, fuel oil and kerosene (the "Products") from various petroleum refineries in the PRC. The Company is 1 of 3 licensed intermediaries in Taiyuan City and the sole licensed intermediary in Gujiao that operates its own large scale storage tanks. The Company has the necessary licenses to operate and sell Products not only in Shanxi but throughout the entire PRC. The Company's storage tanks have the largest storage capacity of any non-government operated entity in Shanxi. The Company seeks to earn profits by selling its products at competitive prices to large-scale gas stations, coal plants, other power-supply customers and small, independent gas stations. The Company also earns revenue by acting as a purchasing agent for other intermediaries in Shanxi and through the sale of diesel and gasoline at gas stations located at each of the Company's facilities. The sales price and the cost basis of the Company's products are largely dependent on the price of crude oil. The price of crude oil is subject to fluctuation due to a variety of factors, all of which are beyond the Company's control. For further information on Longwei Petroleum Investment Holding, Limited, please visit http://www.longweipetroleum.com . You may register to receive Longwei Petroleum Investment Holding Limited's future press releases or request to be added to the Company's distribution list by contacting Dave Gentry at info@RedChip.com or 1-800-733-2447, Ext. 104.

Forward-Looking Statements

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Longwei's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Longwei's operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.

Source: Longwei Petroleum Investment Holding Limited
Related Stocks:
AMEX:LPH
collection