CPC allays fears of an imminent hike in fuel price

State-run Chinese Petroleum Corp (CPC, 中油) said yesterday it does not have any immediate plans to raise gasoline prices, despite the recent dramatic international crude oil price hikes.

CPC President Chen Bao-lang (陳寶郎) made the remarks in response to media speculation that the company might raise its oil product prices again as international crude oil prices have surged to new highs since the CPC raised its gasoline and diesel prices by NT$1.5 per liter on Aug. 2.

"The reports were untrue. Even though the recent surge in crude oil prices has exacted great pressure on our production costs, we won't adjust our product prices for the time being," Chen said.

According to Chen, the CPC imports an average of 16 million barrels of crude oil per month. Therefore, whenever international crude oil prices rise by US$1 a barrel, the CPC's monthly procurement costs soar by US$16 million, or NT$500 million.

When the CPC raised its gasoline and diesel prices on Aug. 2, the average international crude oil price was about US$60 a barrel. As of Friday, crude oil prices had skyrocketed to US$67. The CPC's procurement costs have thus increased by more than NT$3 billion.

Chen said the CPC incurred a loss of NT$3.7 billion in July. The Aug. 2 adjustment was nullified when crude prices reached US$63 per barrel, Chen said, adding that the latest price increases were like "rubbing salt into a wound" and will make CPC's oil product trade deficit deteriorate further.

As CPC is a state-owned enterprise, Chen said, its top priority should be taking good care of people's livelihoods rather than making money.