CPC's president says no oil price hike next month

State-run Chinese Petroleum Corp (CPC, 中油) said yesterday that it would not consider raising oil prices in the next month, despite the continuing escalation in international oil prices.

"We will keep monitoring the situation," Chen Bao-lang (陳寶郎), the company's newly appointed president, said in the handover press conference yesterday.

Crude futures rocketed to a record high of US$43.05 a barrel in New York on Wednesday, the highest level in 21 years, on news that Russian oil giant Yukos could be forced to halt sales.

Rising prices have put pressure on the nation's largest refiner, which has a 70 percent share of the nation's oil market. CPC buys some 220 million barrels of crude oil a year.

"A rise of US$1 per barrel in crude prices costs the company an extra NT$7 billion," said chairman Kuo Chin-tsai (郭進財) yesterday.

The company's wholesale gasoline prices were based on its crude supplies costing more than US$36 or US$37 a barrel, according to spokesman Liao Tsang-long (廖滄龍), CPC's deputy director of industrial relations.

Chen, 61, yesterday took over CPC's presidency from Pan Wenent (潘文炎), who is scheduled to become chairman of affiliate Kuo Kuang Power Co (國光電力).

The former vice president has been working for the company for 37 years, serving in various posts including industrial relations director, planning director and director of the Kaohsiung refinery.

In his inaugural address, Chen said the relocation of the No. 5 naptha cracker in Kaohsiung is the first thorny problem he'll tackle.

The cracker was established in 1990 and the then-premier Hau Pei-tsun (郝柏村) promised city residents that it would be moved in 25 years, which would be in 2015.

"I will be proactive in communicating with residents and seeking their support to keep the factory and transform the cracker into a high-tech park," Chen said.

Promoting and investment projects also top his agenda, Chen said. Expanding the company's business through more investments will help create more jobs and reduce employee's concerns about possible layoffs in the course of privatization, he said.

CPC investing NT$40 billion in a new cracker in Linyuan, Kao-hsiung County, and is evaluating resuming a NT$376 billion investment in a naphtha-cracker complex in Yunlin County. An evaluation is expected to be completed by the end of next month and will be submitted to the Ministry of Economic Affairs, Chen said.

CPC hoping to achieve profits of NT$20 billion on revenue of NT$500 billion this year.