While gasoline prices have been expected to rise in the coming months, the recent appreciation of the NT dollar may postpone any increase until after the Chinese New Year.
The NT dollar closed down yesterday at NT$30.8 to the greenback -- its first fall in six trading sessions -- compared to NT$31.485 at the end of last year. Its strengthening against the US dollar may translate into an estimated saving of NT$360 million when it comes to buying crude oil, according to Chen Chao-wei (3秩竄?, president of the Chinese Petroleum Corp (??油?膝q).
"It's possible that there will be no need to raise the price of gasoline before the Chinese New Year [on Feb. 4]," Chen said. "The rising NT dollar helps to ease the pressure on the price of crude oil."
However, an imminent rise in the price of gasoline is inevitable. According to data provided by Chinese Petroleum, the price of international crude oil more than doubled from US$11.37 a barrel last February to US$25.6 a barrel on Dec. 31. The price of domestic gasoline increased by only 17.35 percent during the same period.
"The price of international crude oil has kept rising, but so far it hasn't been fully reflected in the domestic market price," Chen said.
Another factor likely to push up the price of gasoline is the fact that the state-owned corporation is required to meet an earnings target set by the government. The target for the current fiscal year has been set at NT$17.7 billion.
"As of November last year, the company was still NT$4.6 billion short of the government's targeted revenue," Chen said. "And we believe that the figure will become larger for December."
The complete opening of the oil product market, set for July 1, is likely to make the revenue target even more difficult for the company to meet.
"Last year the company's earnings came to roughly NT$38.5 billion, while this year we budgeted earnings of only NT$17.7 billion," Chen said. "One of the reasons for this is the anticipated competition [which would result in less revenue]."
According to Chen, the corporation expects to see its market share of oil products drop from the current share of 95 percent to 30 to 35 percent after the opening of the market.
"The impact of the market opening will be very significant for CPC," Chen said.
STAYING AHEAD: Fitch said that TSMC remains technologically ahead of others, but Samsung is building a new chip fab, while China is investing in its domestic industry As escalating US-China tensions and COVID-19-related production disruptions force US technology supply chains to transform, Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$12 billion chip fabrication plant in Arizona would be key to spurring greater US production of core semiconductor components, Fitch Ratings said. “We view the US-TSMC alliance as a first step in building a more autonomous US technology supply chain, given high barriers to entry, specifically related to the significant capital and design capability required for leading-edge semiconductor manufacturing,” Fitch said in a statement on Tuesday. “By working with TSMC, US chipmakers will not face the financial burden of incremental investment
DIVERSIFICATION: Although COVID-19 would push more companies to produce in emerging markets, DBS said that it was unlikely that firms would totally leave China Geopolitical tensions and supply disruptions are expected to accelerate the migration of manufacturing out of China, as concerns about the risk of production concentrated in one country increase, S&P Global Ratings said. Although its economic expansion might be weaker than previous levels due to the accelerated relocation of manufacturing, China’s economic growth would still be stronger than that of most other economies, the ratings agency said. “While absolute growth rates will moderate, we believe China’s economic performance will continue to be a key sovereign credit support,” S&P Global Ratings credit analyst Tan Kim Eng (陳錦榮) said in a statement on Thursday. “Its growth
Taiwan’s corporate landscape has changed significantly over the past 20 years, with Hon Hai Precision Industry Co (鴻海精密) replacing Formosa Plastics Corp (台塑) as the revenue leader, while Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) has emerged as the most profitable firm, a survey of Taiwan’s 50 largest companies published on Tuesday last week showed. The Chinese-language CommonWealth Magazine survey ranked Taiwan’s 50 largest companies based on their revenue last year, and compared them with the results of a similar survey it conducted in 2000. Only 33 companies on the original list remained in this year’s rankings, the survey found, following two
The Financial Supervisory Commission (FSC) would set up new guidance by the end of August to boost corporate governance, insurers’ solvency, green financing, financial technology, the trust industry and information security, new FSC Chairman Thomas Huang (黃天牧) said yesterday. “Corporate governance has been improved in terms of compliance and shareholding disclosure with former chairman Wellington Koo (顧立雄) at the helm. It is time to move to the next phase to focus on companies’ roles in sustainable development,” Huang told a news conference in New Taipei City. The commission would also set policies to incentivize companies to increase green financing and adopt the