Gas stations purchasing oil products from Formosa Petrochemical Corp (台塑石化) -- the nation's privately owned oil refiner who announced a 10 percent hike in wholesale prices as from Wednes-day -- decided yesterday to adjust back their prices with immediate effect, after seeing huge losses to competitors overnight.
"Our business have dropped by 67 percent because Chinese Petroleum Corp (CPC,
The retailers have to absorb the extra costs themselves, as CPC did not change its wholesale gasoline prices, which added NT$2.4 to Formosa's gasoline products per liter, and NT$2 to diesel oil products per liter, Kao said.
But gas stations using Formosa Petrochemical's oil products only need to endure the extra costs for a few more days, as state-run CPC is widely expected to raise its wholesale rates within the next two days, Kao said.
Roy Chiu (邱吉雄), CPC's spokesman, refused to confirm any adjustments, saying an announcement will be made after a meeting to be held today.
As CPC supplies more than two-thirds of gasoline products in Taiwan and Formosa Petrochemical the rest, CPC is under a lot more pressure than its rival to hike prices now that the prices of oil futures are hovering at around US$70 per barrel, Kao said.
Refusing to reveal when and how much CPC will hike its wholesale gasoline prices, Minister of Economic Affairs Ho Mei-yueh (
Ho said that CPC has incurred a deficit of more than NT$3 billion last month and with global oil prices having surged by 60 percent from the last local price hike on Aug. 3, it has become necessary for the company to raise its rates to reflect costs.
The rising cost of gasoline has become a concern for the public and government officials, as it may introduce higher commodity prices and thus hurt the nation's economic growth.
The Directorate General of Budget, Accounting and Statistics last month said the nation's GDP growth is likely to increase slightly to 3.65 percent. But Academia Sinica has estimated that a 10 percent hike in oil prices will lower GDP growth by 0.27 percent.