CPC raises domestic gasoline and diesel prices

PRICE STABILIZATION: The Ministry of Economic Affairs has urged the legislature to support the Cabinet’s supplementary budget for state-owned energy companies

State-owned oil supplier CPC Corp, Taiwan (CPC, 台灣中油) on Saturday announced that it would raise domestic gasoline prices by NT$0.7 (US$0.02) per liter and diesel prices by NT$0.6 per liter this week after international crude oil prices rose above US$100 per barrel last week.

Formosa Petrochemical Corp (台塑石化) yesterday said that it matched CPC’s price adjustments for this week.

The decisions end a six-week period during which CPC and Formosa kept fuel prices in Taiwan unchanged.

A man fills up his car at a gas station in Taipei yesterday.

Photo: CNA

Retail gasoline prices this week would rise to NT$31.2, NT$32.7 and NT$34.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively at CPC and Formosa stations, the companies said.

Premium diesel prices would also rise to NT$29.9 per liter at CPC stations and NT$29.7 per liter at Formosa pumps, they said.

Amid escalating military conflicts in the Middle East that have increased risks to crude oil supplies and transportation, CPC said its floating price mechanism, based on a weighted average of 70 percent Dubai and 30 percent Brent crude, showed that the average international crude oil price rose to US$115.61 last week from US$99.82 per barrel in the previous week.

A stronger New Taiwan dollar, which averaged NT$31.556 against the US dollar last week, compared with NT$31.682 a week earlier, helped CPC mitigate the impact from higher crude prices to some extent, the company said.

Overall, CPC’s crude oil price costs rose 12.29 percent last week, it said.

Despite the hike in domestic fuel prices, CPC said it still expected to absorb a loss of NT$6.8 per liter on gasoline sales and NT$8.7 per liter on diesel sales this week, as the company aims to help the government ease domestic inflationary pressure and maintain Taiwan’s competitive edge by keeping local fuel prices lower than in neighboring markets.

The company estimated that by Sunday it would have absorbed NT$19.85 billion in cumulative losses since the war in the Middle East began, by not fully passing on higher crude oil costs to consumers and businesses under the government’s price stabilization measures.

Separately, the Ministry of Economic Affairs yesterday urged the Legislative Yuan to support the Executive Yuan’s supplementary budget for state-owned energy companies, such as CPC and Taiwan Power Co (Taipower, 台電).

The Cabinet on Sept. 3 finalized a supplementary budget that includes a NT$234 billion capital injection and a further NT$101.43 billion in subsidies for CPC to pare its losses from absorbing part of cost increases in fuel and natural gas prices.

The proposal — which is conditional on approval by the opposition-controlled legislature — also includes NT$71.1 billion in subsidies for Taipower to help the loss-making utility offset rising fuel costs arising from the war in the Middle East.