China's petroleum and chemical industry is expected to grow at a slower pace this year, dragged down by the losses in oil refinery businesses and weakening raw materials demand from export-oriented sectors, an industry federation said Monday, Global Times reported.

The industry's total output is expected to reach 12.73 trillion yuan ($2 trillion) in 2012, a 14.5 percent increase year-on-year, according to the China Petroleum and Chemical Industry Federation (CPCIF). The sector saw growth of 31.5 percent year-on-year in 2011. The industry's profits are likely to amount to 860 billion yuan in 2012, up 5 percent from a year earlier.

The industry is facing downward pressure due to sluggish demand from export-oriented sectors such as textiles and toy manufacturing, as well as rising production costs, a growing tax burden and large-scale losses in the refinery and natural gas sectors, said Li Yongwu, chairman of the CPCIF, the newspaper said.