China's oil and petrochemical industry, which experienced sliding profits in the previous six months, is expected to turn around in the second half of the year on the back of a strong oil price, according to government officials.

But the full-year profit of the industry could still be lower than that of last year, as the average oil price could be weaker, they said.

As compared with US$23.3-a-barrel in the first half of the year, the international oil price is likely to linger around US$23-26 a barrel in the second half, which is conducive for the profit pick-up of oil companies, said officials from the State Economic and Trade Commission.

In the first five months of the year, industry profits dropped by 29.7 percent to 36.4 billion yuan (US$440 million) as the oil price retreated by 12.3 percent year-on-year.

The commission said the production glut on the domestic market, including refined oil products and fertilizer, eroded profit.

Meanwhile, a surge in imports of some petrochemical products, alongside tariff reductions and an import quota increase following China's entry to the World Trade Organization (WTO) late last year, has pushed profit further down.

For example, imports of fertilizer jumped by 104 percent to 7.2 million tons in the first five months, and that of plastic products increased by 15.4 percent to 5.5 million tons.

To improve the performance of the industry, the commission said they would "spare no efforts" to shut down small and inefficient refineries to pare down the market oversupply.

China processed 1.4 percent less crude oil in the first half of the year compared to the same period last year, to cut down the high stockpile.

The commission said it would also take measures to cushion the impact of China's accession to the WTO to protect the industry, as long as they are in line with WTO rules.

In the previous six months, China produced 82.7 million tons of crude oil, a rise of 1.82 percent compared with the same period last year.

Natural gas output grew 9 percent to 15.8 billion cubic meters, and fertilizer output grew 12 percent to 18.4 million tons, the commission said.