PetroChina has posted a lower-than-forecasted 12% gain in quarterly profit due to higher costs.

PetroChina’s weak downstream results set an ominous tone for Sinopec China’s largest refiner, which is expected to report its weakest earnings in five quarters on Sunday, reports Reuters.

The company said Beijing was unlikely to implement fuel price hikes in the near term due to worries over inflation.

Chairman Jiang Jiemin also said he was confident natural gas prices will improve this year, however the timing of such a reform is uncertain.

“As you know, our consumer price index was recently 2.7% and our full-year target was 3%,” Jiang said in a statement, referring to China’s CPI.

The company said it would strive to achieve faster growth in its overseas oil and gas businesses, allowing it to control costs by having its own production resources.