Less than a day after saying it would match Formosa Petro-chemical Corp's (台塑石化) recent fuel price reductions, state-run Chinese Petroleum Corp (
At a press conference on Saturday, an executive from Chinese Petroleum officer said that pump prices of gas and diesel at the company's 79 stations would return to normal retail prices as of midnight last night. Alliance partners of Chinese Petroleum -- a group totaling more than 1,000 filling stations -- would not be limited by the decision, he said.
The decision to end the brief but intense "year-end payback" price-slashing competition was a "rational" one, the executive said. There was still time for Chinese Petroleum and Formosa to draw up more suitable and reasonable price-reduction strategies prior to the scheduled liberalization of the petroleum products market set for next year, he said.
The price war between the two petroleum distributors began when the Chinese Petroleum introduced its "year-end payback" promotion, reducing rates at its 79 pumping stations. Formosa countered by lowering fuel rates to wholesale levels on Friday.
Chinese Petroleum responded by slashing its gas and diesel pump prices the following day by margins of NT$1 and NT$0.5 per liter, respectively.
Following extensive deliberations among board members on Saturday, Chinese Petroleum reversed its decision, announcing that all of its pumping stations would return to using its "retail reference price," but said that stations operated by alliance partners could set their own prices.
The battle for control of the domestic oil market comes as Taiwan prepares for admission into the WTO in January next year. Entry into the international trade body will attract oil giants from around the world to the local market.
Exxon Mobil and several other foreign oil giants are expected to enter the local market in January, when the government begins to follow WTO guidelines.
Domestic companies may lower prices to make the local market less appealing to foreign companies, insiders said.
Exxon Mobil has set up an alliance with a local company to build an oil storage tank at the central Taichung port and plans to set up 60 filling stations in Taiwan, local media reported.
RSS