UPDATE 1-Sinopec refining margins tumble, eyes 'normal growth'

* Q3 refining margins at $5.20, down from $9.20 in Q2

* Not aware of govt's next round of fuel price adjustments

* Injection of parent assets possible by yr-end (Adds quotes, detail)

HONG KONG, Oct 30 - Top Asian oil refiner Sinopec Corp said on Friday its refining margins fell by nearly half in the third quarter, but forecast "normal growth" as it banks on China to provide relief by raising fuel prices.

With crude prices near a year high of $82 per barrel even as Beijing cut fuel prices twice in the third quarter, analysts warn that Sinopec --- whose third-quarter net profit more than doubled --- could struggle to repeat the profit surge in the next quarter..

The company must buy some of its crude oil on the global market but can only sell its refined products at strictly regulated government-set prices, putting a squeeze on its margins when oil prices rise.

Sinopec, among the world's top oil refiners by capacity, saw its refining margins in the third-quarter fall to $5.20 per barrel, sharply lower than $9.20 in the second, Wang Xinhua, Sinopec's chief financial officer, said in a conference call.

"International crude oil prices have been rising for consecutive periods, but the fuel price adjustments have not exceeded the increase," Wang said. "So far, we are not aware of the government's next round of adjustments."

"Our refining margins will still maintain normal growth," he said.

Sinopec posted a loss in its refining business in October, an executive said earlier this week..

But analysts expect China to raise retail fuel prices by 5-6 percent soon, after benchmark crude prices rose more than 6 percent since Beijing's last price move..

ASSET INJECTION

Sinopec's earnings in 2009 mark a huge turnaround for the state-owned refiner, which was forced to take losses at its refining operations for most of last year.

The firm said in a statement on Thursday it expects profits for 2009 to rise by more than 50 percent year-on-year. (For a graphic of Sinopec's earnings, click: http://graphics.thomsonreuters.com/109/CN_SNPC1009.gif)

Sinopec, as China's largest refiner, is well positioned to cash in on Beijing's fuel price reform launched this year, which grants refiners a guaranteed profit margin if crude stays below $80 per barrel. Rivals PetroChina and CNOOC have less refining exposure and have benefitted less from four fuel price increases in China this year, with the most recent in September.

Sinopec's state parent could inject some of the group's overseas assets into its listed unit by the end of the year, Wang said, but did not specify the nature of these assets.

"The injection process is under way," he said. "If everything goes smoothly, some assets could be injected into the listed company by the end of this year."

Sinopec's parent engineered China's largest overseas buyout deals with its $7.24 billion bid for Swiss oil explorer Addax Petroleum Corp. in June.

Sinopec will maintain its dividend payout ratio, Wang said.

Shares in Sinopec rose 2.26 percent to HK$6.78 on Friday, trailing a 3.11 percent rise on the benchmark Hang Seng Index.