Premier hopes to keep gas prices at the current level

Premier Frank Hsieh (謝長廷) yesterday said he hoped government officials would do their best to keep domestic gasoline prices unchanged, as crude oil prices held above US$68 a barrel yesterday after Hurricane Katrina swept over the Gulf of Mexico.

"We will try to maintain current price levels as long as possible," Hsieh said. "But, I also admit there is pressure to raise gasoline prices because of the ridiculous price of crude oil."

Hsieh made the remarks yesterday morning, when asked whether domestic gasoline prices would be raised again, after being increased on Aug. 2.

Potential increase

The premier said he would do his best to stabilize prices but acknowledged that an increase was possible.

"But at this time, I have not received any requests from the Ministry of Economic Affairs regarding a potential increase in domestic gas prices," the premier said.

"Gasoline prices shall be decided by the market mechanism. But the volume of oil in reserve, the actual volume of daily consumption, and many other factors must also be considered," he said.

Conserve

Regarding the recent surge in oil prices, Hsieh said that high gas prices will become a global problem. He also urged the public to help save energy.

"We will try our best to reduce the impact of the high gas prices," he said.

Minister of Economic Affairs Ho Mei-yueh (何美玥), however, said yesterday that she is not opposed to state-run Chinese Petroleum Corp (CPC, 中油) raising gasoline prices.

"CPC will see NT$20 billion in losses if oil prices stay at US$70 per barrel through the end of the year, which would wipe out all of the company's earnings this year," Ho said. "Although CPC shoulders a responsibility regarding Taiwan's consumer prices, it still needs to maintain operations."

Crude oil for October delivery rose as much as US$0.76 to US$67.96 a barrel in New York yesterday.

CPC and private competitor Formosa Petrochemical Corp (台塑石化) raised wholesale gasoline prices by 7.64 percent and 7.39 percent, respectively, at the beginning of the month, when oil prices were US$61 to US$62 per barrel.

Higher Costs

Roy Chiu (邱吉雄), a vice president at CPC, said that for every US$1 that oil prices climb, the company loses NT$7 billion for the year. CPC has no plan to make another hike in wholesale gasoline prices so far, as the oil prices may ease after the hurricane that hit the US passes, Chiu said.

A public relations official at Formosa Petrochemical said the company will leave rates unchanged for now.