LNG price increases `inevitable': CPC

State-owned Chinese Petroleum Corp (CPC, 中油) said yesterday that as losses from its liquefied natural gas (LNG) business amounted to NT$2 billion (US$3.17 million) per month, price increases were "inevitable."

CPC vice president Tsao Ming (曹明) said that although the company was given the go-ahead to raise oil prices on April 19, the increase was smaller than it had hoped for, while LNG prices were not adjusted.

The government has authorized CPC to adjust its prices within a 3 percent range. If the company wants to adjust its prices by a larger margin, it has to seek the approval of an assessment panel under the Ministry of Economic Affairs, Tsao said.

However, Tsao said an increase of 3 percent would not allow the company to curb its huge losses.

CPC said it would continue to communicate with the government on the price increases in the hope that it would take international LNG prices into consideration and consent to a "reasonable" adjustment.

The company lost a total of NT$17.4 billion in the first four months of this year, with losses from its LNG and fuel oil units totaling NT$2 billion each per month, Tsao said.

As prices for crude oil have reached US$67 per barrel, the company could lose even more this month, Tsao said. Unless the price drops, the company would not break even this year, he added.