Formosa Petrochemical increases gasoline prices

With the prices of crude oil futures showing no signs of returning from the record-smashing US$70-a-barrel level, Formosa Petrochemical Corp (台塑石化) yesterday raised wholesale gasoline prices by more than 10 percent, pushing the retail price of gasoline to a record high in the nation's history.

Formosa Petrochemical, the nation's private oil refiner, led the hike by raising the wholesale price of gasoline by NT$2.4 per liter and that of diesel oil by NT$2 per liter, effective from 5pm yesterday.

The wholesale price of 98-octane unleaded gasoline was raised to NT$26.517 a liter, that of 95-octane gasoline to NT$25.217, and that of 92-grade to NT$24.517. The wholesale price of top-grade diesel increased to NT$21.1227 per liter and that of normal diesel to NT$20.6227 a liter.

Formosa said the company has to raise its prices to reflect the rising cost of oil. According to a public relations official who preferred not to be named, the company's refining division has seen losses mounting to NT$4 billion.

The state-run Chinese Petroleum Corp (CPC, 中油) is expected to follow suit, although the company hadn't announced any price hikes as of press time last night.

Earlier yesterday, Premier Frank Hsieh (謝長廷) said the company could make its own decision on whether or not to raise prices, but stressed that any decision it makes should not violate the Fair Trade Law (公平交易法).

In the past, the two refiners have almost always adjusted their wholesale oil prices by the same amount at the same time, which has drawn accusations of price collusion from the authorities.

Early last month, CPC and Formosa raised wholesale gasoline prices by 7.64 percent and 7.39 percent respectively when oil prices rose to US$62 per barrel.

If oil futures stay above US$70 a barrel, the company will incur a NT$20 billion deficit this year, Roy Chiu (邱吉雄), a vice president at CPC, told the Taipei Times on Tuesday.