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CPC posts monthly loss of NT$55 million

Chinese Petroleum Corp (中油) racked up losses of NT$55 million in its core petrochemicals business last month, for the first time this year, due to high crude prices and strong competition causing concerns that a planned pay rise for workers may be shelved.

While data showed that in June Chinese Petroleum's pre-tax profits hit NT$535 million, profits from business and investments outside the petrochemical industry amounted to NT$590 million, confirmed a company executive.

The difference of NT$55 million was the result of losses in its core petrochemical business stemming from high crude prices and a depreciating New Taiwan dollar in June, said the executive.

The executive shrugged off the loss, pointing out that in November last year the company chalked up losses in its core petrochemical business of over NT$400 million and that in comparison "the loss for June of NT$55 million isn't much to worry about."

Chinese Petroleum, which traditionally is one of the biggest state-run earners, made headlines last December when it posted overall pre-tax losses of NT$1.094 billion, the first time in the company's history.

The blame at that time was also placed on high crude prices and a weak New Taiwan dollar. However, reports have focused more strongly on the negative impact Formosa Petrochemical Co (台塑石油) has had on the company's bottom line since its entry into the domestic oil market last September.

Since its entry into the market, Formosa has chewed into Chinese Petroleum's gasoline and diesel retail market by over 25 percent.

Local press yesterday speculated that the loss may cause management to bury a proposal to raise salaries for its workers by 3 percent, but the executive said that a decision would be made after a two-month review of the company's performance is completed in August.
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