HONG KONG - Oil companies usually focus on barrels, but Chinese petroleum giant Sinopec is struggling to get a grip on bottles - or, to be more precise, 1,176 bottles of Chateau Lafite Rothschild and expensive Chinese liquor.

The alcohol, purchased with $245,000 in company cash, has created a public relations debacle for Sinopec, China's biggest company by revenue. The scandal is also a headache for the ruling Communist Party, which controls the oil behemoth and appoints its top management, and has reinforced a widespread belief that big state-owned corporations serve the interests - and lavish lifestyles - of a tiny group of insiders.

At a time of rising public anger over high gas prices, Chinese Web sites and even some official media have bubbled with fury over Sinopec's spendthrift ways and mockery of the company's claims that a lone, wayward executive is to blame - and has now coughed up for wine already drunk.

"Is Sinopec an oil company or a wine merchant?" fumed a Chinese commentator on a Web forum dedicated to discussion of the scandal. "Embezzling public money is a crime, but public security (police) has done nothing."

Anger at big oil is hardly unique to China. But Sinopec Corp., listed on stock exchanges in Hong Kong, New York and London, is more than just another global oil outfit. With 75 per cent of its shares held by state-owned Sinopec Group in Beijing, it stands at the center of what Beijing touts as the "China model," an economic order that often looks capitalist but is controlled by - and designed to serve - the Communist Party.

When Sinopec Group got a new boss early last month, for example, the shake-up was announced not by its board of directors but by the Communist Party's Organization Department, a secretive body responsible for most top appointments in business, government, academia and media.

Sinopec's new chief, Fu Chengyu, an urbane, English-speaking petroleum engineer and Central Committee member with a degree from the University of Southern California, became both chairman of the corporation and head of its Party committee.

Fu's predecessor, Su Shulin, moved to a new job as deputy Party chief in Fujian Province, following in the footsteps of another former oil executive, Zhou Yongkang, who now sits on the Poliburo Standing Committee and is responsible for China's vast security apparatus - and for the wave of recent arrests targeted at artists, lawyers and others at odds with the Party.

Sinopec's connections and wealth ensure that it faces little competition and enjoys easy access to credit from state-owned banks. But they also make it a target for public outrage, and a symbol of a system riddled with corruption by politically connected insiders.

The company's financial interests also sometimes clash with its political loyalties. Dependent on imported oil to feed its refineries, Sinopec loses money unless it passes on the global market's rising prices to Chinese consumers. But the state, which regulates gas prices, worries about stoking inflation, which risks fueling political troubles for the Party.

In February, amid mounting public anger over the cost of fuel, Sinopec asked staff to write Internet messages and blogs under false identities to "create a positive opinion environment" for higher prices, according to a leaked internal document issued by the company's "Party Committee Work Bureau." It promised prizes for the best 20 fake messages.

Sun Haifeng, an associate professor at Shenzhen University's School of Communications who exposed the ruse on the Internet, said he'd since been called in "for tea" by the "relevant departments," Chinese code for a questioning by security police. His post got deleted.

Sinopec and other big state corporations "don't operate in the framework of a full market economy but operate in the framework of power," said Sun.