Formosa to boost refining capacity 80%

Formosa Petrochemical Corp (台塑石化), Taiwan's only private oil refiner, expects to boost the use of its refining capacity to an average 80 percent next year as demand from China buoys prices of gasoline and diesel.

Formosa Petrochemical expects to operate at more than 90 percent this month, giving it an average refinery operation rate of more than 70 percent in the second half of this year, executive vice president Su Chi-yi (蘇啟邑) told reporters at the company's petrochemical complex in Mailiao, Yunlin county. Last year, the refinery used about 50 percent of capacity.

World oil demand is rising faster than expected this year and next as economic expansion gathers pace and consumption in China, the world's sixth-largest economy, surges, the International Energy Agency, an adviser to 26 nations on oil policy, said this week.

"When we were doing our refining capacity forecast of about 70 percent three months ago, we didn't expect demand would pick up so quickly," Su said. "Demand for diesel and gasoline has held up recently because the growth in China is very big, especially in the fourth quarter."

Last year, Formosa Petrochemical derived 63 percent of its sales from gasoline, diesel and other oil products, while 26 percent came from ethylene, propylene and other petrochemicals, which are supplied to Formosa affiliates such as Formosa Plastics Corp (台塑) and Nan Ya Plastics Corp (南亞塑膠).