UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  Form 10-Q   X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2008  _ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ____ to _____   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED (Exact name of registrant as specified in its charter)  Colorado
0-31751
84-1536518(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification Number)No.30 Guanghua Street, Xiaojingyu Xiang, Wanbailin
District
Taiyuan City, Shanxi Province, China P.C. 030024(Address of principal executive
offices)  Registrants telephone number, including area code:  (303)
885-5501  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X   No ___  Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated filer and smaller reporting company
in Rule 12b-2 of the Exchange Act.  Large
accelerated filer

Accelerated
filerNon-accelerated
filer (Do not check if a smaller reporting company)

Smaller
reporting company
X  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.) Yes   No X  Indicate
the number of shares outstanding of each of the issuer's classes of stock, as of
the latest practicable date. Class of Securities
Shares Outstanding at December 31, 2008Common Stock, no par value
76,205,000          - 1 -   PART
1 - FINANCIAL INFORMATION    ITEM
1. FINANCIAL
STATEMENTS  (a)
The unaudited financial statements of registrant for six months ended December
31, 2008, follow.  The financial statements reflect all adjustments which
are, in the opinion of management, necessary to a fair statement of the results
for the interim period presented.        TABLE OF CONTENTS    Balance
Sheets 3 Statements
of Operations and Comprehensive Income (Unaudited) 4 Statement
of Changes in Stockholders Equity (Unaudited) 5 Statements
of Cash Flows (Unaudited) 6 Notes
to Unaudited Financial Statements 7         - 2 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED BALANCE SHEETS AS OF DECEMBER 31, 2008 AND JUNE 30, 2008    December 31,
2008


June 30,
2008UnauditedASSETSCurrent assets:Cash and
cash equivalents

$
9,641,900

$
8,632,879Accounts
receivable


27,584,670


12,134,507Inventories


18,746,621


29,052,841Advance to
suppliers


34,174,816


28,327,067Deposits


15,829,974


12,683,880Total current assets


105,977,981


90,831,174Construction in progress


820,813


-Property, plant and equipment,
net


3,628,107


2,637,326Total assets

$
110,426,901

$
93,468,500LIABILITIES AND
STOCKHOLDERS EQUITYCurrent liabilities:Accounts
payable

$
-

$
165,231Convertible
notes payable, net of discount of $ 0 and $636,742, respectively


2,268,000


1,508,135Accrued
payables


684,332


798,436Taxes
payable


4,048,948


2,455,223Total current
liabilities


7,001,280


4,927,025Total liabilities


7,001,280


4,927,025STOCKHOLDERS
EQUITYCommon
Stock; no par value, 100,000,000 shares authorized 76,205,000  and
76,205,000 shares issued and
outstanding as of 12/31/08 and 06/30/08, respectively


7,008,712


7,008,712Additional paid-in
capital


1,528,180


1,528,180Retained earnings


82,992,579


68,742,653Accumulated other comprehensive
income


11,896,150


11,261,930Total stockholders equity


103,425,621


88,541,475Total liabilities and
stockholders equity

$
110,426,901

$
93,468,500    See accompanying notes
to the unaudited financial statements   - 3 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (Unaudited) FOR THREE MONTHS AND
SIX MONTHSENDED DECEMBER 31,
2008 AND 2007  Three months
ended December 31,

Six
months ended December 31,2008


2007


2008


2007Net revenues:Product
sales
$
50,160,497

$
36,257,575

$
92,686,693

$
68,368,276Agency service

3,482,490


3,472,219


5,431,780


7,850,19053,642,987


39,729,794


98,118,473


76,218,466Cost of
revenuesProduct
sales

41,703,435


28,302,891


76,538,910


53,737,384Agency service

-


536,719


-


796,11641,703,435


28,839,610


76,538,910


54,533,500Gross
profit

11,939,552


10,890,184


21,579,563


21,684,966Operating
ExpensesSalaries

46,048


73,653


91,846


109,662Other
selling, general and administrative expenses

(3,049)


1,529,150


2,118,300


1,850,57542,999


1,602,803


2,210,146


1,960,237Operating
profit

11,896,553


9,287,381


19,369,417


19,724,729Other income and
(expenses)Interest
income

4,134


3,854


7,970


22,854Interest expense
and financial cost

(102,474)


(302,762)


(124,068)


(2,762)Other
income/(expense)

(98,340)


(298,908)


(116,098)


20,092Income before
income taxes

11,798,213


8,988,473


19,253,319


19,744,821Income
taxes

(3,038,764)


(3,237,624)


(5,003,393)


(6,675,202)Net income

8,759,449


5,750,849


14,249,926


13,069,619Other
comprehensive incomeForeign
currency translation adjustment

(436,430)


1,871,808


634,220


2,653,766Comprehensive income
$
8,323,019

$
7,622,657

$
14,884,146

$
15,723,385Basic net income per
share
$
0.11

$
0.08

$
0.19

$
0.18Weighted
average number of shares outstanding

76,205,000


73,956,522


76,205,000


71,478,261   See accompanying notes
to the unaudited financial statements.    - 4 -      LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) FOR THE SIX MONTHS
ENDED DECEMBER 31, 2008   Common stock
shares

Common stock
amount

Additional paid-in
capital

Retained
earnings


Accumulated other
comprehen- sive income


Total
stockholders equityBalance at June 30, 2008
76,205,000
$
7,008,712
$
1,528,180
$
68,742,653

$
11,261,930

$
88,541,475Net income for the
period
-

-

-

14,249,926





14,249,926Foreign
currency translation adjustment
-

-

-

-


634,220


634,220Balance at December 31,
2008
76,205,000

7,008,712

1,528,180

82,992,579


11,896,150


103,425,621                 See accompanying notes
to the unaudited financial statements.  - 5 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED STATEMENTS OF CASH FLOWS
(Unaudited) FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007    Six months ended December 31,2008


2007Operating
activitiesNet
income






$
14,249,926

$
13,069,619Adjustments
to reconcile net income from operations to net cash used in operating
activities:Depreciation







196,676


179,599Warrant
expense







636,742


127,348Accrued
interest







123,123


2,762Changes
in non-cash operating working capital items:Accounts
receivable







(15,385,066)


(8,009,420)Other
receivable







(3,078,051)Inventory







10,462,076


(4,755,726)Advance
to suppliers







(5,695,786)


(7,130,352)Prepaid
taxes







-


1,475,158Accounts
payable







(192,671)


240,234Advance
from customers







-


(379,057)Taxes
payable







1,580,553


3,173,125Other
current liabilities







19,051


43,240Net
cash provided by (used in) operating activities







2,916,573


(1,963,470)Investing
activitiesPurchase
of equipment







(1,994,122)


(15,621)Net
cash used in investing activities







(1,994,122)


(15,621)Financing
activitiesProceeds
from the issuance of the convertible notes







-


2,100,000Payment
for share issuance cost







-


-Net
cash provided by financing  activities







-


2,100,000Effect
of exchange rate changes in cash







86,570


2,655,059Net
increase in cash and cash equivalents







1,009,021


2,775,968Cash
and cash equivalents, beginning of the period







8,632,879


6,060,428Cash
and cash equivalents, end of the period






$
9,641,900

$
8,836,396Supplemental
disclosure of cash flow informationCash
paid during the period:Income
taxes paid






$
3,960,761

$
2,919,949      See accompanying notes
to the financial statements.      - 6 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007    1. MANAGEMENT'S
REPRESENTATION OF INTERIM FINANCIAL INFORMATION  The
accompanying financial statements have been prepared by Longwei Petroleum
Investment Holding Limited, Inc. without audit pursuant to the rules and
regulations of the Securities and Exchange Commission.  Certain information
and disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted as
allowed by such rules and regulations, and management believes that the
disclosures are adequate to make the information presented not misleading.
 These financial statements include all of the adjustments, which in the
opinion of management are necessary to a fair presentation of financial position
and results of operations.  All such adjustments are of a normal and
recurring nature. Interim results are not necessarily indicative of results for
a full year.  2. SIGNIFICANT
ACCOUNTING POLICIES  This summary of significant accounting policies of the Company is
presented to assist in understanding the Companys financial statements.
 The financial statements and notes are representations of the Companys
management, which is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.  Description
of Business  Longwei Petroleum Investment Holding Limited (we, us, our,
Longwei) was incorporated under the laws of the State of Colorado on March 17,
2000, under the name of Tabatha II, Inc. We changed our name to Longwei
Petroleum Investment Holding Limited on October 12, 2007. We were formed as a
blind pool or blank check company whose business plan was to seek to acquire
a business opportunity through completion of a merger, exchange of stock, or
other similar type of transaction. In furtherance of our business plan, we
voluntarily elected to become subject to the periodic reporting obligations of
the Securities Exchange Act of 1934 by filing a registration statement on Form
10-SB.  Prior to October 16, 2007, our only business activities were the
organizational activities described above, including registration under the
Securities Exchange Act of 1934, and efforts to locate a suitable business
opportunity for acquisition. On October 16, 2007, the date of the closing of the
Share Exchange, we acquired all of the issued and outstanding common stock of
Longwei Petroleum Investment Holding Limited (Longwei BVI), a British Virgin
Islands corporation incorporated on April 3, 2006.  Longwei BVI owns all of
the issued and outstanding stock of Taiyuan Yahua Energy Conversion Co., Ltd.
(Taiyuan Yahua), a Chinese limited liability company, which in turn is the
sole shareholder of Taiyuan Longwei Economy & Trading
Co., Ltd. (Taiyuan Longwei), a Chinese limited liability company.
  We issued 69,000,000 shares of common stock in the share exchange
transaction for 100% of the ownership of Longwei BVI. As a result of the share
exchange transaction, Longwei BVI and its subsidiaries became our wholly owned
subsidiaries.    - 7 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007  2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  The former stockholders of Longwei BVI acquired 92% of our issued
and outstanding common stock as a result of closing the share exchange
transaction.  Therefore, although Longwei BVI became our wholly-owned
subsidiary, the transaction was accounted for as a recapitalization of Longwei
BVI, whereby Longwei BVI is deemed to be the accounting acquirer and is deemed
to have adopted our capital structure.  All operating activities are carried out through our wholly-owned
Chinese subsidiary, Taiyuan Longwei Economy & Trading Co., Ltd. (Taiyuan
Longwei), which was incorporated in 1995.  The operating company is
located in Taiyuan City, China.  We purchase diesel, gasoline, fuel oil and
kerosene from various suppliers. As an intermediary, we seek to earn profits by
buying diesel, gasoline, fuel oil and kerosene at competitive prices and selling
them to other wholesalers. In addition, we also earn revenues by acting as a
purchase agent where we charge an agency fee, a fee which is charged to
wholesalers who do not have a license to purchase directly from refineries.
Further, the company owns a gas station located on its property where it
generates additional profit and revenue. The cost of our products is largely
dependent on the price of crude oil. The price of crude oil is subject to
fluctuation due to a variety of factors, all of which are beyond our control.
When sudden and significant increases occur in the cost of fuel and lubricant
products, we may not be able to pass on these increases through timely price
increases to our customers. The timing of passing these costs to our customers
can significantly affect our margins. The affect of lower crude oil prices,
after the sale for a short time of higher priced inventory on hand at the time
of the price decrease, reduces the cost of the products which, in turn, improves
profit margins. Fuel oil is a liquid petroleum product that is burned in a
furnace or boiler for the generation of heat or used in an engine for the
generation of power. Solvents are unrefined petroleum products used in paint,
dry-cleaning solvents, solvents for cutback asphalts and solvents for the rubber
industry. We transport and market these products to other wholesale buyers. Our
primary customers are large-scale gas stations, which represent 60% of our
sales. These gas stations, which purchase diesel and gasoline from us, are
located in Taiyuan City in the Shanxi Province of China. Our second largest
group of customers is the coal plants and power supply companies that use our
fuel oil for heat and power, along with our solvents, which comprise 30% of our
business. Our third largest customers are the small independent gas stations.
These represent 10% of our total sales, and purchase gasoline and diesel. Our
operating company is located at No. 30 Guanghua Avenue, Xiaojingyu Xiang,Wan
Bailin District, Taiyuan City, P.C. 030024, Shanxi Province, China, and our
phone number is (86) 351-6527-366.   (a)    Basis
of Preparation  The
financial statements of the Company are prepared in accordance with accounting
principles generally accepted in the United States of America and include the
accounts of the Company. This basis of accounting differs in certain material
respects from that used for the preparation of the books and records of the
Company, which are prepared in accordance with the accounting principles and the
relevant financial regulations applicable to enterprises with limited
liabilities, established in the PRC (PRC GAAP) the accounting standards used
in the place of their domicile.   - 8 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007  2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)   (b)    Economic
and Political Risks  The
Company's operations are conducted in the PRC. Accordingly, the Company's
business, financial condition and results of operations may be influenced by the
political, economic and legal environment in the PRC, and by the general state
of the PRC economy.  The
Company's operations in the PRC are subject to special considerations and
significant risks not typically associated with companies in North America and
Western Europe. These include risks associated with, among others, the
political, economic and legal environment and foreign currency exchange. The
Company's results may be adversely affected by changes in the political and
social conditions in the PRC, and by changes in governmental policies with
respect to laws and regulations, anti-inflationary measures, currency
conversion, remittances abroad, and rates and methods of taxation.  (c)    Principles
of Consolidation   The
accompanying financial statements include Longwei Petroleum Investment Holding
Limited, Inc., its wholly owned subsidiary, Longwei Petroleum Investment Holding
Limited, a British Virgin Island corporation, its wholly owned subsidiary,
Taiyuan Yahua Energy Conversion Co., Ltd., a Chinese Limited Liability Company,
which owns 100% of the operating subsidiary, Taiyuan Longwei Economy &
Trading Company, Ltd., a Chinese Limited Liability Company.  Intercompany
transactions have been eliminated in consolidation.  (d)    Property,
Plant and Equipment  Property,
plant and equipment are carried at cost less accumulated depreciation.
Depreciation is provided over the assets' estimated useful lives, using the
straight-line method. Estimated useful lives of the property, plant and
equipment are as follows:  Buildings


20
yearsHeavy
machinery and production equipment


8-
20 yearsRailway


20
yearsMotor
vehicles


5
years  The
cost and related accumulated depreciation of assets sold or otherwise retired
are eliminated from the accounts and any gain or loss is included in the
statement of income. The cost of maintenance and repairs is charged to the
statement of income as incurred, whereas significant renewals and betterments
are capitalized.   - 9 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007   2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  (e)    Accounting
for the Impairment of Long-Lived Assets  The
long-lived assets held and used by the Company are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
assets may not be recoverable. It is reasonably possible that these assets could
become impaired as a result of technology or other industry changes.
Determination of recoverability of assets to be held and used is by comparing
the carrying amount of an asset to future net undiscounted cash flows to be
generated by the assets. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to
sell.  There
was no impairment of long-lived assets as of December 31, 2008.  (f)    Inventories  Inventories
are stated at the lower of cost, determined on a weighted average basis, or net
realizable value. Net realizable value is the estimated selling price in the
ordinary course of business less the estimated cost of completion and the
estimated costs necessary to make the sale.  When
inventories are sold, their carrying amount is charged to expense in the year in
which the revenue is recognized. Write-downs for declines in net realizable
value or for losses of inventories are recognized as an expense in the year the
impairment or loss occurs. There were no declines in net realizable value of
inventory for six months ended December 31, 2008.  (g)
   Accounts Receivable  Trade
receivables are recognized and carried at the original invoice amount less
allowance for any uncollectible amounts. An estimate for doubtful accounts is
made when collection of the full amount is no longer probable. Bad debts are
written off as incurred.  (h)    Cash
and Cash Equivalents  The
Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. Cash deposit in PRC
banks are not insured by any government agency or entity.  (i)    Advances
to Suppliers  Advances
to suppliers represent the cash paid in advance for purchasing of inventory
items from suppliers.  (j)    Fair
Value of Financial Instruments  The
Company's financial instruments include cash and cash equivalents, accounts
receivable, prepaid taxes, advances to suppliers, other current assets, taxes
payable, accounts payable and advances from customers.   - 10 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND
2007  2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  Management
estimates that the carrying amounts of the non-related party financial
instruments approximate their fair values due to their short-term nature.  (k)    Revenue
Recognition  The
Company derives the bulk of its revenue from sales of gasoline, diesel, solvent
oil and fuel oil. These product sales revenues are recognized when customers
take possession of goods in accordance with the terms of purchase order
agreements that evidence agreed upon pricing and when collectability is
reasonably assured. Cost of revenues for product sales include costs to purchase
and transport the product to the Company, costs to deliver the goods to the
customer and depreciation on product storage and delivery equipment.  Agency
service revenue consists of fees charged to small fuel distributors who lack the
required licenses to purchase directly from large refineries. The Company
allocates a portion of its purchasing quota to these customers for a fee similar
to a sales commission. Agency service revenue is recognized when there is
evidence of an arrangement that specifies pricing and irrevocable allocation of
a portion of the Companys purchase quota and collection has occurred. Cost of
agency service revenues consists primarily of selling commissions.  (l)    Foreign
Currency Translation  The
functional currency of the Company is Renminbi (RMB) and the RMB is not freely
convertible into foreign currencies. The Company maintains its financial
statements in the functional currency. Monetary assets and liabilities
denominated in currencies other than the functional currency are converted into
the functional currency at rates of exchange prevailing at the balance sheet
date. Transactions denominated in currencies other than the functional currency
are converted into the functional currency at the exchange rates prevailing at
the dates of the transactions. Exchange gains or losses arising from foreign
currency transactions, which are not material, are included in the determination
of net income for the respective periods.  For
financial reporting purposes, the financial statements of the Company which are
prepared using the functional currency have been translated into United States
dollars. Assets and liabilities are translated at exchange rates at the balance
sheet dates and revenue and expenses are translated at the average exchange
rates for each period and stockholders' equity is translated at historical
exchange rates. Any translation adjustments resulting are not included in
determining net income but are included in foreign currency translation
adjustment to other comprehensive income, a component of stockholders' equity.
The exchange rates adopted are as follows:  2008Period
end RMB exchange rate


6.8225Average
period RMB exchange rate


6.8408  No
representation is made that the RMB amounts could have been, or could be,
converted into U.S. dollars at the rates used in translation.    - 11 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007  2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  (m)    Use
of Estimates  The
preparation of the financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Management makes these estimates using the best
information available at the time the estimates are made; however actual results
could differ materially from those estimates.  (n)    Income
Taxes  The
company has implemented SFAS No. 109, "Accounting for Income Taxes," which
provides for a liability approach to accounting for income taxes. Deferred
income taxes result from the effect of transactions that are recognized in
different periods for financial and tax reporting purposes. The company has
recorded no deferred tax assets or liabilities as of December 31, 2008, since
nearly all differences in tax bases and financial statement carrying values are
permanent differences.  (o)    Recent
Accounting Pronouncements  In December 2007, the FASB issued Statement of
Financial Accounting Standards No. 141 (revised 2007), Business
Combinations (FAS 141R) and Statement of Financial Accounting Standards
No. 160, Noncontrolling Interests in Consolidated Financial Statements, an
Amendment of ARB No. 51 (FAS 160). These new standards are the
U.S. GAAP outcome of a joint project with the International Accounting
Standards Board (IASB). FAS 141R applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008 and
will significantly change the accounting for business combinations in a number
of areas, including the treatment of contingent consideration, acquisition
costs, intellectual property, research and development, and restructuring costs.
FAS 160 establishes reporting requirements that clearly identify and
distinguish between the interests of the parent and the interests of the
non-controlling owners. The Company is currently evaluating the impact of
adopting FAS 141R and FAS 160 on its Consolidated Financial Statements
which are effective for the Company at the beginning of its fiscal year 2010. In March 2008, the FASB issued Statement of
Financial Accounting Standards No. 161, Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133
(FAS 161), which requires enhanced disclosures about a companys
derivative and hedging activities. The Company currently is evaluating the
impact of the adoption of the enhanced disclosures required by FAS 161
which is effective for the Company at the beginning of its fiscal year
2010. In May 2008, the FASB issued Statement of
Financial Accounting Standards No. 162, The Hierarchy of Generally
Accepted Accounting Principles (FAS 162). The new standard is intended to
improve financial reporting by identifying a consistent framework, or hierarchy,
for selecting accounting principles to be used in preparing financial statements
that are presented in conformity with generally accepted accounting principles
(GAAP) for nongovernmental entities in the United States. FAS 162 is
effective 60 days following SEC approval of the Public Company Accounting
Oversight Board Auditing amendments to AU Section 411, The Meaning of
Present Fairly in Conformity with Generally Accepted Accounting Principles. The
Company is currently evaluating the impact, if any, of adopting FAS 162, on
its Consolidated Financial Statement  - 12 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008
AND 2007 In May 2008, the FASB issued SFAS No. 163,
Accounting for Financial Guarantee Insurance Contracts  an Interpretation of
FASB Statement No. 60 (SFAS 163).  SFAS 163 clarifies how Statement 60
applies to financial guarantee insurance contracts, including the recognition
and measurement of premium revenue and claim liabilities.  This Statement
also requires expanded disclosures about financial guarantee insurance
contracts.  SFAS 163 is effective for fiscal years beginning on or after
December 15, 2008, and interim periods within those fiscal years.  The
Company does not expect that the adoption of SFAS 163 will have a material
impact on its financial statements.  3.    ACCOUNTS
RECEIVABLE  The receivables and allowance balances at December 31 and June 30,
2008are as follows:  December 31, 2008

June 30,2008Accounts
receivable

$
27,584,670

$
12,134,507Less:
allowance for doubtful accounts


-


-Accounts
receivable, net

$
27,584,670

$
12,134,507  4.    INVENTORIES  Inventories
are the unsold petroleum products purchased from various suppliers, and consist
of the following as of December 31 and June 30, 2008:  December 31,

June 30,2008

2008Diesel
Oil
$
7,097,812
$
16,433,154Gasoline

9,177,098

12,619,687Solvent
Oil

2,189,838

-Fuel
Oil

281,873

-Less:
allowances for slowing moving items

-

-Total
$
18,746,621
$
29,052,841   5.    ADVANCE
TO SUPPLIERS  The Company has made payments to unrelated suppliers in advance of
receiving products and services. The advance payments are meant to ensure
preferential pricing and delivery. The amounts advanced under such arrangements
totaled $ 34,174,816 and $ 28,327,067as of December 31, 2008 and June 30,
2008.   - 13 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007  6. CONSTRUCTION
IN PROGRESS  The
Company has made improvements on its machine and equipment in the gas stations,
which can prolong their useful life, and the cost is recorded to Construction in
progress, and  transferred to property, plant and equipment when the
improvement is completed.  30-Jun-08

Addition

Transferred to property, plant and equipment

31-Dec-08Construction in
progress
$
-
$
1,993,404
$
1,172,591
$
820,813   7.    PROPERTY,
PLANT AND EQUIPMENT  At December 31
and June 30, 2008, property, plant and equipment, at cost, consist of  June 30, 2008

Impact of foreign currency exchange rate

Additions

December 31, 2008Land and buildings
$
2,052,874
$
10,983
$
-
$
2,063,857Machinery
and production equipment

4,454,536

23,870

1,173,309

5,651,715Total
property, plant and equipment

6,507,410

34,853

1,173,309

7,715,572Less: accumulated depreciation

(3,870,084)

-

(217,381)

(4,087,465)Property, plant and equipment, net
$
2,637,326
$
34,853
$
955,928
$
3,628,107  Depreciation
expense for the six months ended December 31, 2008 was $ 212,739.   8.  TAXES PAYABLE  Taxes payable consist of the following:  December 31, 2008

June 30, 2008Income tax payable
$
2,260,687
$
1,190,002Value Added Tax payable

1,426,983

963,178Business taxes payable and others

361,278

302,043Total
$
4,048,948
$
2,455,223   - 14 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007  9.  ACCRUED PAYABLES  Other current liabilities consist of the following:  December 31, 2008

June 30, 2008Accrued
salaries
$
15,302
$
15,221Accrued
staff welfare

250,806

230,518Accrued expenses and miscellaneous

418,224

552,697Total
$
684,332
$
798,436   10.    INCOME
TAXES  (a)     Corporation Income Tax
(CIT)  The
Company is governed by the Income Tax Laws of the PRC. The PRC federal statutory
tax rate is 25% since January 1, 2008.  The provision for income taxes for six months ended December 31,
2008 is summarized as follows:  2008Current






$
5,003,393Deferred







-$
5,003,393  (b)     Value Added Tax (VAT)  In
accordance with the relevant taxation laws in the PRC, the normal VAT rate for
domestic sales is 5% to 17%, which is levied on the invoiced value of sales and
is payable by the purchaser. The Company is required to remit the VAT it
collects to the tax authority.  The
value added tax refundable presents the VAT that the Company paid for the
purchasing products and can be used to deduct the VAT related to the sale of
products.   - 15 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007  11.
   SEGMENT INFORMATION   For the three
months ended December 31, 2008AgencyProduct
sales

Service


TotalRevenues
50,160,497

3,482,490


53,642,987Cost of revenues
41,703,435

-


41,703,435Gross profit
8,457,062

3,482,490


11,939,552Income from operations
8,414,063

3,482,490


11,896,553Total assets
110,426,901

-


110,426,901Depreciation
100,210

-


100,210For the
three months ended December 31, 2007AgencyProduct
sales

Service


TotalRevenues
$
     36,257,575

$
   3,472,219


$
    39,729,794Cost of revenues
28,302,891

536,719


28,839,610Gross profit
$
       7,954,684

$
   2,935,500


$
     10,890,184Income from operations
$
       6,351,881

$
    2,935,500


$
       9,287,381Total assets
$
     81,774,542

$
                  -


$
     81,774,542Depreciation
$
            89,965

$
                  -


$
            89,965  For the six months
ended December 31, 2008AgencyProduct
sales

Service


TotalRevenues
92,686,693

5,431,780


98,118,473Cost of revenues
76,538,910

-


76,538,910Gross profit
16,147,783

5,431,780


21,579,563Income from operations
13,937,637

5,431,780


19,369,417Total assets
110,426,901

-


110,426,901Depreciation
196,676

-


196,676For the six
months ended December 31, 2007AgencyProduct
sales

Service


TotalRevenues
$
 68,368,276

$
 7,850,190


$ 76,218,466Cost of revenues
53,737,384

796,116


54,533,500Gross profit
$
 14,630,892

$
  7,054,074


$ 21,684,966Income from operations
$
  12,670,655

$
  7,054,074


$ 19,724,729Total assets
$
  81,774,542

$
                -


$  81,774,542Depreciation
$
       179,599

$
                -


$
      179,599  - 16 -   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 AND 2007  12.
   GEOGRAPHICAL INFORMATION  The Company's revenues by geographic destination are
analyzed as follows:  For the Three
Months Ended December 31,2008

2007PRC
$
53,642,987
$
39,729,794Outside
PRC

-

-Total net revenues
$
53,642,987
$
39,729,794  For the six
Months Ended December 31,2008

2007PRC
$
98,118,473
$
76,218,466Outside
PRC

-

-Total net revenues
$
98,118,473
$
76,218,466  13.
   WARRANTS AND CONVERTIBLE NOTES  We completed a convertible note on December 18, 2007, in the
amount of $2,100,000 at an interest rate of 4% per annum, with a conversion
feature of $0.70 per share (the conversion price) at the option of the investor.
 Additionally, warrants were granted at an exercise price of $0.80. The
convertible note will give the Company $2,100,000. After disbursement of fees
and expenses, the Company netted $1,800,000.   On January 29, 2009,
the company entered into an amendment agreement where the notes dated December
18, 2007 were extended to September 18, 2009 at an interest rate of 8%.
 The investors in turn will be issued Class B Warrants with the expiration
date being for a term of five years. Both the Class A and B will have an
exercise price of $.80 per share and will convert into the company's common
shares. The investors will have piggyback registration rights on the common
shares underlying the Class A and Class B Warrants. The investors will have
cashless exercise rights on the Warrants. The company paid interest of $168,000
representing the accrued interest on the Notes as of December 18, 2008. In using
the Black- Scholes Calculation the company will have a total expense of
$1,528,180 for the life of the warrants.  The note was for a period of 12
months expiring December 17, 2008. Each months expense would be $127,348.      - 17 -   ITEM
 2. MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  DISCLAIMER
REGARDING FORWARD LOOKING STATEMENTS  Certain
statements in this Form 10-Q, which are not statements of historical fact, are
what are known as "forward-looking statements," which are basically statements
about the future. For that reason, these statements involve risk and uncertainty
since no one can accurately predict the future. Words such as "plans,"
"intends," "hopes," "seeks," "anticipates," "expects," and the like, often
identify such forward looking statements, but are not the only indication that a
statement is a forward-looking statement. Such forward-looking statements
include statements concerning our plans and objectives with respect to our
present and future operations, and statements which express or imply that such
present and future operations will or may produce revenues, income or profits.
These and other factors may cause our actual results to differ materially from
any forward-looking statement.  We caution you not to place undue reliance
on these forward-looking statements.  Although we base these
forward-looking statements on our expectations, assumptions, and projections
about future events, actual events and results may differ materially, and our
expectations, assumptions, and projections may prove to be inaccurate. The
forward-looking statements speak only as of the date hereof, and we expressly
disclaim any obligation to publicly release the results of any revisions to
these forward-looking statements to reflect events or circumstances after the
date of this filing.  Overview  Longwei Petroleum Investment Holding Limited (we, us, our,
Longwei) was incorporated under the laws of the State of Colorado on March 17,
2000, under the name of Tabatha II, Inc. We changed our name to Longwei
Petroleum Investment Holding Limited on October 12, 2007. We were formed as a
blind pool or blank check company whose business plan was to seek to acquire
a business opportunity through completion of a merger, exchange of stock, or
other similar type of transaction. In furtherance of our business plan, we
voluntarily elected to become subject to the periodic reporting obligations of
the Securities Exchange Act of 1934 by filing a registration statement on Form
10-SB.  Prior to October 16, 2007, our only business activities were the
organizational activities described above, including registration under the
Securities Exchange Act of 1934, and efforts to locate a suitable business
opportunity for acquisition. On October 16, 2007, the date of the closing of the
Share Exchange, we acquired all of the issued and outstanding common stock of
Longwei Petroleum Investment Holding Limited (Longwei BVI), a British Virgin
Islands corporation incorporated on April 3, 2006.  Longwei BVI owns all of
the issued and outstanding stock of Taiyuan Yahua Energy Conversion Co., Ltd.
(Taiyuan Yahua), a Chinese limited liability company, which is in turn the
sole shareholder of Taiyuan Longwei Economy & Trading Co., Ltd. (Taiyuan
Longwei), a Chinese limited liability company.   We issued 69,000,000
shares in the share exchange transaction for 100% of the ownership of Longwei
BVI. As a result of the share exchange transaction, Longwei BVI and its
subsidiaries became our wholly owned subsidiaries.  Taiyuan Yahua was incorporated on August 11, 2006.  The
operating subsidiary, Taiyuan Longwei, is located in Taiyuan City, China, and
was established in 1995 as a Chinese limited liability company.  We
purchase diesel, gasoline, fuel oil and kerosene from various suppliers. As a
licensed intermediary, we seek to earn profits by buying diesel gasoline fuel
oil and kerosene at competitive prices and selling them to other wholesalers. In
addition, we also earn revenue by acting as a purchase agent where we charge an
agency fee, a fee which is charged to other wholesalers who do not have a
license to purchase directly from refineries.   The cost of our
products is largely dependent on the price of crude oil. The price of crude oil
is subject to fluctuation due to a variety of factors, all of which are beyond
our control. When sudden and significant increases occur in the cost of fuel and
lubricant products, we may not be able to pass on these increases through timely
price increases to our customers. The timing of passing these costs through to
our customers can significantly affect our margins. The affect of lower crude
oil prices, after the sale for a short time of higher priced inventory on hand
at the time of the price decrease, reduces the cost of the products which in
turn improves profit margins. Fuel oil is a liquid petroleum product that is
burned in a furnace or boiler for the generation of heat or used in an engine
for the  - 18 -   generation of power.  Solvents are unrefined petroleum
products used in paint, dry-cleaning solvents, solvents for cutback asphalts and
solvents for the rubber industry. We transport and market these products to
other wholesale buyers.  Our primary customers are large-scale gas
stations, which represent 60% of our sales and which are located in Taiyuan City
in the Shanxi Province of China.  They primarily buy diesel and gasoline.
 Our second largest group of customers is coal plants and power supply
companies which use our fuel oil for heat and power along with our solvents;
these comprise 30% of our business.  Our third largest customer is the
small, independent gas station which represents 10% of our total sales.
 These stations buy gasoline and diesel from us.  We currently have 14 storage tanks that allow us to store 50,000
metric tons of our products. In addition, we own our own rail system to
transport our products to our customers.  We have been granted a Finish Oil Wholesale license which allows
our company to engage in the wholesale business of gasoline, fuel oil and diesel
oil.  This license is granted by the Peoples Republic of China.  In
addition, we also have a special license for Dangerous Chemical Products
Businesses that allows us to handle gasoline and diesel oil.  The Finish
Oil Wholesale License allows us to engage in the business of these products.
There is no expiration date on this license.  The Dangerous Chemical
Products Businesses license is renewed every three years.  The Peoples
Republic of Chinas constitution states that all mineral and oil resources
belong to the State.  Without these licenses, we would not be allowed to
sell our products.   Results of Operations  Revenue  The following table shows the different components comprising our
total revenue for the three months ending December 31, 2008 and December 31,
2007.  All amounts in thousands of U.S. dollars  Sales by Products
2008
% of total revenues
Volume of sales in thousands
2007
% of total revenues
Volume of sales in thousands(gallons)


(gallons)Diesel
Oil
27,013
50.4%
9,258
20,847
52.5%
8,651Gasoline
21,248
39.6%
7,274
9,895
24.9%
4,477Fuel
Oil
650
1.2%
604
2,153
5.4%
1,087Kerosene
1,249
2.3%
302
3,363
8.5%
1,682TOTALS
Petroleum Products
50,160
93.5%
17,438
36,258
91.3%
16,897Agency
Fee
3,483
6.5%

3,472
8.7%TOTAL
REVENUE
53,643
100%

39,730
100%    - 19 -   The following table shows the different components comprising our
total revenue for the six months ending December 31, 2008 and December 31,
2007.   All amounts in thousands of U.S. dollars  Sales by Products
2008
% of total revenues
Volume of sales in thousands
2007
% of total revenues
Volume of sales in thousands(gallons)


(gallons)Diesel
Oil
52,552
53.6%
18,112
39,183
51.4%
17,154Gasoline
38,235
39.0%
13,267
22,434
29.4%
10,129Fuel
Oil
650
.6%
604
3,388
4.5%
1,710Kerosene
1,249
1.3%
302
3,363
4.4%
1,682TOTALS
Petroleum Products
92,686
94.5%
32,285
68,368
89.7%
31,675Agency
Fee
5,432
5.5%

7,850
10.3%TOTAL
REVENUE
98,118
100%

76,218
100%   For the three months ended December 31, 2008, revenues were
$53.643 million, an increase of $13.913 million or approximately 35.0% as
compared to $39.730 million for the same period in December 31, 2007. This
increase was the result of stronger overall demand for petroleum products.
 Diesel sales were $27.013 million or approximately 9.258 million gallons, an increase of $6.166 million
and a increase of  approximately .607 million gallons, in the three months
period year ending December 31, 2008, compared to $20.847 million or
approximately 9.651 million gallons for the three months ending December 31,
2007. Gasoline sales were $21.248 million or approximately 7.274 million
gallons, an increase of $11.353 million or approximately 114.7% increase and an
increase of 2.797 million gallon, compared to gasoline sales of $9.895 million
or approximately 4.477 million gallons for the three months ending December 31,
2007.   This increase was mainly the result of greater purchases by
our existing customers, primarily power supply companies due to the continued
growth of Shanxi Province.  For the six months ended December 31, 2008, revenues were $98.118
million, an increase of $21.900 million or approximately 28.7% as compared to
$76.218 million for the same period in December 31, 2007. This increase was the
result of stronger overall demand for petroleum products.  Diesel sales
were $52.552 million or approximately 18.112 million gallons, an increase of $13.369
million and an increase of  approximately .958 million gallons, in the six
months period year ending December 31, 2008, compared to $39.183 million or
approximately 17.154 million gallons for the six months ending December 31,
2007. Gasoline sales were $38.235 million or approximately 13.267 million
gallons, an increase of $15.801 million or approximately 70.4% increase and an
increase of 3.138 million gallon, compared to gasoline sales of $22.434 million
or approximately 10.129 million gallons for the six months ending December 31,
2007.   This increase was mainly the result of greater purchases by
our existing customers, primarily power supply companies due to the continued
growth of Shanxi Province. In addition, the increase of petroleum products for
the six months ending December 31, 2008 was mainly due to the following factors:
the population in China in general has become wealthier; as a result, the demand
for petroleum has increased and the economy in Shanxi Province where the
Company's major customers are continued to experience growth. Management expects
growth for the fiscal year 2009 to remain strong due to (i) continued strong
growth in the China economy, (ii) a continued improvement in the wealth of its
citizens, and (iii) business strategy of increasing storage for our products.
 For the six months ended December 31, 2008, 45 %  - 20 -   of our customers were large-scale gas stations located in Taiyuan
City in the Shanxi Province, compared to 60% for the six months ended December
31, 2007.   Our second largest group of customers is coal plants and
power supply companies which use our diesel, gasoline and fuel oil to generate
heat and power this group provided 45% of our business in 2008 compared to 30%
in 2007. This group of customers will continue to remain strong as our local
economy continues to grow and new power plants are built. We anticipate that in
the fiscal year 2009 this group will represent 55% to 60% of our sales, as the
company will focus on this particular customer segment due to larger bulk sales.
Our third largest customer is the small, independent gas station which
represents 10% of our total sales.  These stations buy gasoline and diesel
from us.  This group will continue to remain strong as more cars are being
used for transportation in Shanxi Province.  Agency fees were $3.483 million for the three months period ending
December 31, 2008 compared to $3.472 million for the three months ending
December 31, 2007 a slight increase of .11 million. Agency fee revenues were $5.432 million for the six months
ended December 31, 2008, compared to $7.850 million in the same period of 2007.
 The decrease of $2.418 million or approximately 30.8% was due to the
expected decline in agency fees. Agency fees are fees from companies not
possessing the required license to buy direct from refineries.   We
purchase petroleum on their behalf and arrange delivery for them.  The
China government continues to grant licenses to other wholesalers to buy direct.
Thus, we anticipate that agency fees will be reduced further in the future
unless we are able to obtain new customers that want to go direct but do not
have the required license.  Cost of Goods Sold Cost of goods sold for the three months ended December 31, 2008
increased by $12.863 million or 44.6 %, to $41.703 million as compared to
$28.840 million for the same quarter of 2007. This increase was mainly
attributable to the increase of sales revenue.  Cost of goods sold for the six months ended December 31, 2008
increased by $22.005 million or 40.3 %, to $76.539 million as compared to
$54.534 million for the six months period December 31, 2007. This increase was
mainly attributable to the increase of sales revenue  The following table illustrates the items constituting our cost of
goods sold for the three months ending December 31, 2008 and December 31,
2007.  (All amounts, other than percentages, in thousands of U.S.
dollars)  Cost
of Goods
2008
% of total cost of goods sold
% of total cost of goods vs its revenue
2007
% of total cost of goods
% of total cost of goods vs revenueDiesel
Oil
22,949
55.0%
85.0%
14,798
51.3%
71.0%Gasoline
17,055
40.9%
80.3%
8,697
30.2%
87.9%Fuel
Oil
575
1.4%
88.5%
1,830
6.3%
85.0%Kerosene
1,124
2.7%
90.0%
2,978
10.3%
88.6%TOTAL
COST
Petroleum
Products
41,703
100%
83.1%
28,303
98.1%
78.1%Agency
Fee
0
0%
0%
537
1.9%
15.5%TOTAL
COST OF GOODS
41,703
100%

28,840
100%    - 21 -   The following table illustrates the items constituting our cost of
goods sold for the six months ending December 31, 2008 and December 31,
2007.  (All amounts, other than percentages, in thousands of U.S.
dollars)  Cost
of Goods
2008
% of total cost of goods sold
% of total cost of goods vs its revenue
2007
% of total cost of goods
% of total cost of goods vs revenueDiesel
Oil
44,701
58.4%
85.0%
29,481
54.1%
75.2%Gasoline
30,139
39.4%
78.8%
18,470
33.9%
82.3%Fuel
Oil
575
.7%
88.5%
2,808
5.0%
82.9%Kerosene
1,124
1.5%
90.0%
2,978
5.5%
88.6%TOTAL
COST
Petroleum
Products
76,539
100%
78.0%
53,737
98.5%
78.6%Agency
Fee
0
0%
0%
797
1.5%
10.1%TOTAL
COST OF GOODS
76,539
100%

54,534
100%   Gross
Profit Margin  Our gross profit margin was 22.3% for the three months ended
December 31, 2008, compared to 27.4% for the three months ended December 31,
2007. The decrease was the result of the gross margins on diesel were
approximately 15.0% for the quarter ending December 31, 2008 compared to 29.0%
in quarter ending December 31, 2007.  The gross margins on gasoline were
approximately 19.7% in the quarter ending December 31, 2008 compared to 12.1%
for the same quarter in 2007, improving by approximately 7.6%. The decrease of
diesel margins was the result of the company locking in fuel prices where diesel
prices decreased.  The increase in gasoline margins was the result of
higher demand for gasoline in the Shanxi Province primarily by our power supply
customers.  Our gross profit margin was 22.0% for the six months ended
December 31, 2008, compared to 28.5% for the six months ended December 31, 2007.
The decrease was the result of the gross margins on diesel were approximately
15.0% for the six months ending December 31, 2008 compared to 24.8% in six
months ending December 31, 2007.  The gross margins on gasoline were
approximately 21.2% in the six months period ending December 31, 2008 compared
to 17.7% for the same quarter in 2007, improving by approximately 3.5%. The
decrease of diesel margins was the result of the company locking in fuel prices
where diesel prices decreased.  The increase in gasoline margins was the
result of higher demand for gasoline in the Shanxi Province  primarily by
our power supply customers .  The company made advance to suppliers of approximately $34.175
million in the six months ending December 31, 2008 compared to $22.676 million
in December 31, 2007. The risk associated with maintaining huge quantities of
inventory and amounts of advances to suppliers has the effect of locking in
prices.  We pay for fuel well in advance of the time we deliver commodities
and establish customer prices.  Therefore, our gross margins will vary
considerably from period to period, based on short-term prices of petroleum
products. Management does not provide any type of hedging activity in order to
reduce this risk; however management monitors petroleum prices in an effort to
maintain profitability. Selling General and Administrative Expenses  - 22 -    Selling, general and administrative expenses were $42,999 for the
three months ending December 31, 2008, as compared to $1,529,150 as a result of
a holiday period in the last week of the quarter in  China where many of
the administrative expenses were paid in the first quarter to avoid having late
payments.  Selling, general and administrative expenses were $2.118 million
for the six months ending December 31, 2008, a $.267 million increase, compared
to $1.850 for the same period in 2007.  The increases for  the six
month period was due to the increased costs associated with the being public.  Depreciation and Amortization  Depreciation and amortization expenses were $100,210 for the
quarter ending December 31, 2008, an increase of $10,245 over the depreciation
expense of $89,965 for the quarter ending December 31, 2007.  Depreciation and amortization expenses were $196,676 for the six
months ending December 31, 2008, an increase of $17,077 over the depreciation
expense of $179,599 for the six months ending December 31, 2007.   Income Tax Expenses  We incurred income tax expenses of $3,038,764 for the quarter
ending December 31, 2008, a decrease of $198,860 or approximately 6.1%, versus
$3,237,624 for the quarter ending December 31, 2007. We incurred income tax expenses of $5,003,393 for the six months
ending December 31, 2008, a decrease of $1,671,809 or approximately 25.0%,
versus $6,675,202 for the six months ending December 31, 2007. The company is
governed by the income tax laws of China. The China statutory tax rate is 30%
and the local tax rate is 3%.  Net Income  We earned a net income of $8.759 million for the quarter ended
December 31, 2008, an increase of $3.008 million or approximately 52.3% as
compared to $5.750 million for the quarter ending December 31, 2007. This was
primarily due to the increase in sales of petroleum products especially to power
supply companies in the Shanxi Province during the quarter.  In the six-month period ending December 31, 2008 net income was
$14.250 million, an increase of $1.180 million or approximately 9.0% as compared
to $13.070 million for six month period ending December 31, 2007. This was
primarily due to the increase in sales of petroleum products especially to power
supply companies in the Shanxi Province during the period.   Net Income Margin  Net income margin for the quarter ending December 31, 2008 was
approximately 16.3% compared to approximately 14.5% for the quarter ending
December 31, 2007. This increase as described above was largely the result of
higher profit margins on gasoline products. In addition agency fees contributed
to the improved margins as agency fee profits increased by $546,990. Management
anticipates that net income margin will remain in the 12 to 17% profit range due
to increase of costs associated with being a public company and the future
declines in agency fees.  Net income margin for the six months ending December 31, 2008 was
approximately 14.5% compared to approximately 17.1% for the six months ending
December 31, 2007. This decrease was the result of a decline in diesel profit
margins due to the company locking in prices well in advance prior to selling to
their customers. In addition, agency fee profit decreased by $1.622. Management
anticipates that net income margin will remain in  - 23 -   the 12 to 17% profit range due to increase of costs associated
with being a public company and the future declines in agency fees.  Inflation  Inflationary factors such as increases in the cost of our product
and overhead costs may adversely affect our operating results. Although we do
not believe that inflation has had a material impact on our financial position
or results of operations to date, a high rate of inflation in the future may
have an adverse effect on our ability to maintain current levels of gross margin
and selling, general and administrative expenses as a percentage of net revenues
if the selling prices of our products do not increase with these increased
costs.  Foreign Currency Translation Adjustment  Our operating subsidiaries are located in China.  The
operating subsidiaries purchase all products and render services in China, and
receive payment from customers in China using RMB as the functional currency.
 We do not engage in currency hedging.  We incurred a foreign currency translation adjustment loss of
$436,430 for the quarter ending December 31, 2008 as compared with the foreign
currency translation adjustment gain of $1,871,808 for the quarter ending
December 31, 2007. On July 21, 2005, China reformed its foreign currency
exchange policy, revalued RMB by 2.1 percent and allowed the RMB to appreciate
as much as 0.3 percent per day against the U.S. dollar. We implemented different
exchange rates in translating RMB into U.S. dollars in our financial statements
for quarter ending December 31, 2008. We used an exchange rate of 6.82 for
assets and liabilities and used the average exchange rate of 6.84 for revenues
and expenses, compared to the exchange rate of 7.31 in 2007 for assets and
liabilities and 7.41 as the average rate used in calculating revenue and
expenses. Historical exchange rates for shareholders equity were used.  Assets and liabilities are translated at exchange rates at the
balance sheet dates and revenue and expenses are translated at the average
exchange rates and shareholders equity is translated at historical exchange
rates. Any translation adjustments resulting are not included in determining net
income but are included in foreign exchange adjustment to other comprehensive
income, a component of stockholders equity.  If the RMB appreciates
against the U.S. dollar, revenue and expenses would be higher than they would
have been if there were no fluctuations in the currencies.  Conversely, if
the RMB depreciates against the U.S. dollar, revenue and expenses would be lower
than they would have been if there were no fluctuations in the currencies. The
exchange rates adopted are as follows for quarter ending December 31, 2008 and
December 31, 2007:  2008
2007Year
end RMB: exchange rate


7.304


6.859Average
yearly RMB: exchange rate


7.406


7.276  Liquidity and Capital Resources  As of December 31, 2008, we had cash and cash equivalents of
$9,641,900 compared to cash and cash equivalents in the beginning of the period
of $8,632,879 in period ending December 31, 2007. This was primarily the result
of a decrease in inventories. The following table provides detailed information
about our net cash flow for the December 31 period in 2008 and 2007
respectively.  - 24 -    For the quarter ended December 31,2008

2007Cash and cash equivalents, beginning of period

$
8,632,879

$
6,060,428Net cash provided (used in) operating activities

$
2,916,573

$
(1,963,470)Net cash (used in) investing activities


(1,994,122)


(15,621)Net cash provided by financing activities


-


2,100,000Effect of exchange rate, changes in cash


86,570


2,655,059Cash and cash equivalents, end of the period

$
9,641,900

$
8,836,396  Operating Activities:  Net cash provided in operating activities was
$$2,916,573for the six month period ending December 31, 2008,
compared in the net cash used of $1,963,470 for the six months period ending
December 31, 2007. This was largely the result of decreases in inventory as a
result of strong. This was partially offset by increases to advances to
suppliers to increase inventory levels to meet demands of our customers.  Investing Activities:  Net cash used in investing activities was $1,994,122 in the six
months ending December 31, 2008 to purchase new storage equipment to prepare for
anticipated stronger demand from our customers. This compares to net cash used
in investing activities of $15,622 in December 31, 2007.  Financing Activities:    The company had no cash used in financing activities in the six
month period ending December 31, 2008 compared to net cash used in financing
activities of $2,100,000 in the same period of December, 2007.  Critical Accounting Policies  The preparation of financial statements, in conformity with
accounting principles generally accepted in the United States, requires our
management to make assumptions, estimates and judgments that affect the amounts
reported in the financial statements, including the notes thereto, and related
disclosures of commitments and contingencies, if any. We consider our critical
accounting policies to be those that require the more significant judgments and
estimates in the preparation of financial statements, including the following: Basis of Consolidation - The consolidated financial
statements of the Company and its subsidiaries are prepared in accordance with
accounting principles generally accepted in the United States of America and
include the accounts of the Company and its subsidiaries. All material
inter-company accounts and transactions have been eliminated in the
consolidation.  Inventories -Inventories are stated at the lower of cost, determined on a weighted
average basis, or net realizable value. Net realizable value is the estimated
selling price in the ordinary course of business less the estimated costs
necessary to make the sale.  When inventories are sold, their carrying amount is charged to
expense in the year in which the revenue is recognized. Write-downs for declines
in net realizable value or for losses of inventories are recognized as an
expense in the year the impairment or loss occurs. There were no declines in net
realizable value of inventory for the six-month period ending December 31,
2008.  Revenue Recognition  The Company derives the bulk of its revenue from the trading of
gasoline, diesel, kerosene and fuel oil, and also has revenues from agency
service and transportation service.  - 25 -   In accordance with the Securities and Exchange Commission ("SEC")
Staff Accounting Bulletin No. 104, Revenue Recognition ("SAB 104"), the Company
recognizes revenue when the following fundamental criteria are met: (i)
persuasive evidence of an arrangement exists, (ii) delivery has occurred or
services have been rendered, (iii) the price to the customer is fixed or
determinable and (iv) collection of the resulting receivable is reasonably
assured.  Foreign Currency Translation - The functional currency of
the Company is RMB and RMB is not freely convertible into foreign currencies.
The Company maintains its financial statements in the functional currency.
Monetary assets and liabilities denominated in currencies other than the
functional currency are translated into the functional currency at rates of
exchange prevailing at the balance sheet date. Transactions denominated in
currencies other than the functional currency are translated into the functional
currency at the exchange rates prevailing at the dates of the transactions.
Exchange gains or losses arising from foreign currency transactions are included
in the determination of net income for the respective periods.  Use of Estimates-The preparation of the financial
statements in conformity with generally accepted accounting principles in the
United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Management makes these estimates using the best information available at the
time the estimates are made; however actual results could differ materially from
those estimates.   Recent Accounting Pronouncements  In
December 2007, the FASB issued SFAS No. 141R, "Business Combinations"
("SFAS No. 141R"). SFAS No. 141R amends SFAS 141 and provides
revised guidance for recognizing and measuring identifiable assets and goodwill
acquired, liabilities assumed, and any noncontrolling interest in the acquiree.
It also provides disclosure requirements to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. It is effective for fiscal years beginning on or after
December 15, 2008 and will be applied prospectively. We are currently
evaluating the impact of adopting SFAS No. 141R on our consolidated
financial statements. In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements  an amendment of ARB No. 51" ("SFAS
No. 160). SFAS No. 160 requires that ownership interests in subsidiaries held
by parties other than the parent, and the amount of consolidated net income, be
clearly identified, labeled, and presented in the consolidated financial
statements. It also requires once a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. Sufficient disclosures are required to clearly identify and
distinguish between the interests of the parent and the interests of the
noncontrolling owners. It is effective for fiscal years beginning on or after
December 15, 2008 and requires retroactive adoption of the presentation and
disclosure requirements for existing minority interests. All other requirements
shall be applied prospectively. We are currently evaluating the impact of
adopting SFAS No. 160 on our consolidated financial statements. In
March 2008, FASB issued Financial Accounting Standards No. 161, Disclosure
about Derivative Instruments and Hedging Activities - an amendment to FASB
Statement No. 133. The use and complexity of derivative instruments and
hedging activities have increased significantly over the past several years.
Constituents have expressed concerns that the existing disclosure requirements
in FASB Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities, do not provide adequate information about how derivative and
hedging activities affect an entitys financial position, financial performance,
and cash flows. Accordingly, this Statement requires enhanced disclosures about
an entitys derivative and hedging activities and thereby improves the
transparency of financial reporting. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008.  In
May 2008, the FASB issued Statement No. 162, The Hierarchy of Generally
Accepted Accounting Principles.  This statement identifies the sources
of accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements of nongovernmental entities that
are presented in  - 26 -   conformity
with generally accepted accounting principles (GAAP) in the United States (the
GAAP hierarchy).  This statement is effective 60 days following the SECs
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, the Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles. In May 2008, the FASB issued Statement No. 163Accounting for
Financial Guarantee Insurance Contractsan interpretation of FASB Statement No.
60.The premium revenue recognition approach for a financial
guarantee insurance contract links premium revenue recognition to the amount of
insurance protection and the period in which it is provided. For purposes of
this statement, the amount of insurance protection provided is assumed to be a
function of the insured principal amount outstanding, since the premium received
requires the insurance enterprise to stand ready to protect holders of an
insured financial obligation from loss due to default over the period of the
insured financial obligation.  This Statement is effective for financial
statements issued for fiscal years beginning after December 15, 2008.  Seasonality  Our operating results and operating cash flows historically have
been subject to seasonal variations. Our revenues are usually higher in the
first half of the year than in the second half of the year because of the
increased demand for gasoline and diesel during and around the Chinese spring
festival.  Off-Balance Sheet Arrangements  We do not have any off-balance sheet arrangements.        - 27 -   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK  Interest Rate Risk  The Company deposits surplus funds with Chinese banks earning
daily interest. The Company does not invest in any instruments for trading
purposes. The Companys operations are not sensitive to fluctuations in interest
rates.  Foreign Exchange Risk  While our reporting currency is the U.S. Dollar, all of our
consolidated revenues and consolidated costs and expenses are denominated in
RMB. All of our assets are denominated in RMB. As a result, we are exposed to
foreign exchange risk as our revenues and results of operations may be affected
by fluctuations in the exchange rate between U.S. Dollars and RMB. If the RMB
depreciates against the U.S. Dollar, the value of our RMB revenues, earnings and
assets as expressed in our U.S. Dollar financial statements will decline. We
have not entered into any hedging transactions in an effort to reduce our
exposure to foreign exchange risk.  Inflation  Inflationary factors such as increases in the cost of our product
and overhead costs may adversely affect our operating results. Although we do
not believe that inflation has had a material impact on our financial position
or results of operations to date, a high rate of inflation in the future may
have an adverse effect on our ability to maintain current levels of gross margin
and selling, general and administrative expenses as a percentage of net revenues
if the selling prices of our products do not increase with these increased
costs.  Commodity Risk  There is uncertainty related to the Chinese government's ability
and/or willingness to subsidize Company operations in a declining market.
 Additionally, the risk associated with maintaining large quantities of
inventory and amounts of advances to suppliers has the effect of locking in
prices the Company pays for fuel well in advance of the time we deliver the
commodities and establish customer pricing.  A dip in short-term prices in
fuel costs will result in declining profits for the Company, which will affect
the Company's ability to purchase future petroleum products and make advances to
suppliers, since the Company uses its cash to purchase inventory and increase
advances to suppliers. We manage our exposure in the following ways: if the
price of petroleum declines significantly, the Company will buy additional
petroleum inventory to provide a lower average cost.  Purchase of petroleum
products from refineries has a fixed price based on volume. The price will be
properly adjusted by the refinery in light of the market if there should be
significant changes in the price of oil.  The refineries in China are under
the control of the Chinese government. Therefore, our market risk is limited as
a result of the control by the Chinese government.At the present time, the Chinese government is not concerned with gross
margins on services such as agency fees.  The Chinese government allows the
market to determine prices. In the event that the company exceeds the unofficial
guideline of 40% consolidated gross margins the impact of agency fees would be
taken into account and deducted from total gross margins in determining if this
limit has been exceeded. There is no indication that these policies will change
in the future regarding any type of guidelines for agency fees gross
profits.    - 28 -   CORPORATE STRUCTURE  The chart below depicts our corporate structure. As depicted below, we own 100% of the capital stock of Longwei
BVI.  Longwei BVI incorporated in the British Virgin Islands in April 2006,
owns 100% of the capital stock of Taiyuan Yahua, and Taiyuan Yahua owns 100% of
the capital stock of Taiyuan Longwei, the operating subsidiary.  Taiyuan Yahua was established in August 2006 as a
Chinese limited liability company.  Taiyuan Longwei was established as a
Chinese limited liability company in July 1995.  As of October 16, 2007,
the date of the closing of the Share Exchange Agreement, all of our operations
are conducted by and through Taiyuan Longwei.  [corpstructures1.gif]  - 29 -   ITEM
4T. CONTROLS
AND PROCEDURES  The
Securities and Exchange Commission defines the term disclosure controls and
procedures to mean a company's controls and other procedures of an issuer that
are designed to ensure that information required to be disclosed in the reports
that it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commissions rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Securities Exchange Act of 1934 is
accumulated and communicated to the issuers management, including its principal
executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure.  The Company maintains such a system of controls and procedures
in an effort to ensure that all information which it is required to disclose in
the reports it files under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified under the
SEC's rules and forms and that information required to be disclosed is
accumulated and communicated to principal executive and principal financial
officers to allow timely decisions regarding disclosure. As
of the end of the period covered by this report, we carried out an evaluation,
under the supervision and with the participation of our chief executive officer
and principal accounting officer, of the effectiveness of the design and
operation of our disclosure controls and procedures.  Based on this
evaluation, our chief executive officer and principal accounting officer
concluded that our disclosure controls and procedures are designed to provide
reasonable assurance of achieving the objectives of timely alerting them to
material information required to be included in our periodic SEC reports and of
ensuring that such information is recorded, processed, summarized and reported
with the time periods specified.  Our chief executive officer and principal
accounting officer also concluded that our disclosure controls and procedures
were effective as of June 30, 2008 to provide reasonable assurance of the
achievement of these objectives.  There
was no change in the Company's internal control over financial reporting during
the six month period ended December 31, 2008, that has materially affected, or
is reasonably likely to materially affect, the Company's internal control over
financial reporting.     - 30 -   PART
II.  OTHER INFORMATION  Item
1. Legal
Proceedings None   Item 1A. Risk Factors  We face risks in operating our business, including risks that may
prevent us from achieving our business objectives or that may adversely affect
our business, financial condition and operating results. Risks relating to our
business and industry include, among others: our ability to attract new
customers; our ability to maintain our gross margin of petroleum products and
petroleum product purchases, and competition and competitive factors in the
markets in which we compete.  There are no material changes to the risk
factors previously disclosed in the Company's last annual report on Form
10-K.   Item
2. Unregistered
Sales of Equity Securities and Use of Proceeds None  Item
3. Defaults
upon Senior Securities None  Item
4. Submission
of Matters to a Vote of Security Holders None  Item
5. Other
Information None  Item
6. Exhibits  The
following exhibits are filed herewith:  3(i) Articles
of Incorporation (incorporated by reference from Registration Statement on Form
3(i) Articles of Incorporation (incorporated by reference from Registration
Statement on Form 10-SB filed with the Securities and Exchange Commission on
October 11, 2000).  3(ii) Bylaws
(incorporated by reference from Registration Statement on Form 10-SB filed with
the Securities and Exchange Commission on October 11, 2000).  31.1 Certifications
pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of
1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.  31.2 Certifications
pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of
1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.  32.1 Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.  32.2 Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.   - 31 -   SIGNATURES  In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.   LONGWEI
PETROLEUM INVESTMENT HOLDING LIMITED    By:
/s/ Cai Yongjun, Chief Executive Officer (duly authorized officer)   By:
/s/ Wang Junping, Chief Financial Officer (principal accounting and financial
officer)     Date:
 February 13, 2009             - 32 -