PETROCHINA Co, the nation's largest oil company, fell the most in three weeks in Hong Kong trading after Citigroup Inc downgraded the stock on concern mounting refining losses will weigh on earnings.

PetroChina dropped as much 4.3 percent to HK$9.82 (US$1.26), the biggest decline since March 20. The stock's rating was cut to "sell" from "hold," Citigroup analyst Graham Cunningham said in a report yesterday.

PetroChina and China Petroleum & Chemical Corp are unable to pass on the rising cost of the oil they turn into gasoline and diesel because of Chinese fuel-price curbs designed to combat inflation. Benchmark New York oil, 79 percent higher than a year ago, touched a record US$112.21 a barrel on Wednesday.

"While higher prices will drive higher exploration and production earnings, we expect this to be more than offset by higher losses in PetroChina's refining division," Cunningham said.

China Petroleum, or Sinopec, as Asia's largest oil refiner is known, dropped as much as 4.7 percent to HK$6.68 in Hong Kong trading. Cnooc Ltd, China's third-largest oil company and which doesn't operate refineries, gained as much as 2.2 percent to HK$12.24. PetroChina is expected to announce first-quarter results on April 28,.