State-run Chinese Petroleum Corp (CPC,
"Even if we do hike the prices in June, the range won't exceed NT$1.3 per liter, which is the largest adjustment we've made in 1990," CPC president Wenent Pan (潘文炎) told a press conference yesterday.
"However, we'll fix the current rates through the month as we promised, considering the abrupt hikes may heavily impact on the nation's consumer prices," he said.
The price of benchmark Brent North Sea crude oil for July delivery fell to US$37.13 per barrel in early London trading yesterday, in anticipation of a hike in production by OPEC soon.
New York's benchmark light sweet crude for June delivery fell US$0.75 to US$40.75 per barrel on Thursday, US$0.80 shy of the record closing high point set earlier in the week.
As a result of the soaring prices, CPC, the nation's largest oil refiner, has paid NT$2.7 billion more for crude oil in this month than it did last month, Pan said.
To cover the additional costs, the company would have to raise the price of wholesale gasoline by NT$1.5 per liter and diesel by NT$2.1 per liter, he added.
Chairman Kuo Chin-tsai (郭進財) said on Thursday that the company will hold the prices at the current level only if the costs fall to NT$37.1.
But that appears unlikely, given that oil prices show no signs of dropping.
Unrest in the Middle East, surging demand from the US and China and OPEC's oil production quotas are fueling the rise in oil prices, according to Pan. Nevertheless, he guaranteed that after a possible price increase next month, the nation's gasoline prices will still be NT$2 lower than the lowest prices in markets elsewhere in Asia.
In other news, Pan attributed the company's better-than-expected performance to its exports of oil products, as well as its improvement in oil-refining operations.
CPC reported a pre-tax income of NT$5.835 billion for the first four months of the year, an increase of NT$3.216 billion from its goal, according to statistics released by the Commission of National Corporations under the Ministry of Eco-nomic Affairs on Wednesday.
Meanwhile, Formosa Petrochemical Corp (台塑石化) will match CPC's price hikes if the range is reasonable, Matiz Lin (林明憲), a public relations official, said yesterday.
Lin said that although Formosa Petrochemical has no government support, it exports about 40 percent of its oil products and sees comparatively low losses from the rising oil costs.
"In the past, Chinese Petroleum usually ratcheted up oil prices less than NT$1 per liter, so I think their upcoming price hikes may range from NT$0.5 to NT$0.8," Lin said. "For now, they are still testing the market acceptance to the adjusted prices with various rates."
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