Oil refiners decide to reduce gas prices

With oil prices falling after US troops continued their drive toward Baghdad, two of the nation's largest oil refiners announced yesterday that they will reduce gasoline and diesel prices.

Formosa Petrochemical Corp (台塑石化), the nation's second-largest refiner, will cut the wholesale price of gasoline by NT$1.5 per liter and diesel by NT$1 per liter, Su Chi-yi (蘇啟邑), a Formosa Petrochemical spokesman said.

"Despite fluctuations in oil prices because of the war in the Middle East, we believe there is room to lower our wholesale prices," Su said.

The company will also cut the price of liquefied natural gas by NT$1 per kilogram, Su said, adding that these price changes would become effective today.

The state-run Chinese Petroleum Corp (中油) said it will follow suit by matching Formosa Petrochemical's price cuts, citing the price of West Texas Intermediate crude oil fell US$1.22 to US$28.56 a barrel on Wednesday on the New York Mercantile Exchange.

"We have to compete with our rival [Formosa Petrochemical] to defend our market share," said Liao Tsang-long (廖滄龍), Chinese Petroleum's spokesman, "although pricing pressure is relatively high because of the obligation to maintain oil reserves for at least 120 days."

Chinese Petroleum bought most of its stock for oil reserves at prices above US$30 a barrel before the war broke out, Liao said.