Longwei Petroleum Investment Holding Ltd. (OTCBB:LPIH), a profitable diesel, gasoline, fuel oil, and solvent oil distributor operating in Taiyuan City, Shanxi Province in the People’s Republic of China, continues to make good on its long-term plans for success.

Oil tank construction at Longwei Gujiao Oil Depot

Longwei’s oil and diesel sales remains strong in the heavy-industry region of Shanxi. Revenues for the three months ending March 31, 2009 were $49.7 million, an increase of almost $17.25 million, or approximately 53% as compared to the same period in 2008. Net income for the quarter ended March 31, 2009, was up 32% to $6.7 million, with net margin of 13.4%. Since January 2009, Longwei’s stock has appreciated 423%, moving from $0.22 to $1.15 at market close on June 10, 2009.

That Longwei is located in Shanxi is no coincidence. For centuries in China, Shanxi Province was the center of trade and wealth, and to call someone a “Shanxi Merchant” was basically to call them a wealthy person. Pingyao, an ancient city in the province and a UNESCO World Heritage site, was an early financial center and the site of China’s first bank, Rishengchang Exchange Shop. Additionally, Shanxi contains 260 billion metric tons of coal deposits, which is about one-third of China’s total known reserves.

Construction at Gujiao Oil Depot, Shanxi Province, China

Longwei’s future looks bright, especially given China’s astronomical growth in the last thirty years. It is estimated by the International Energy Agency that China will be burning about 16.5 million barrels of oil per day by 2030, and purchasing 13.1 million barrels. Demand has already massively outstripped supply as the Chinese energy infrastructure continues to grow; the distribution of goods is limited by constraints on fuel resources, and construction cannot always progress on time for the same reason. However, Longwei’s ownership of its own railway system surmounts some of the aforementioned obstacles facing its competitors.

Construction on the railway line at the Longwei Gujiao Oil Depot.