Su keeps CPC waiting on gas price rises

Premier Su Tseng-chang (蘇貞昌) said yesterday that the price of gasoline should be determined by the market, but added that the price adjustment should not impact on consumer prices.

Su made the remarks at a celebration of Chinese Petroleum Corp's (CPC, 中油) 60th anniversary.

At the same celebration CPC chairman Pan Wenent (潘文炎) sought the government's support in allowing oil prices to be adjusted in line with the fluctuations of the market.

"We've encountered a big crisis this year ? we hope to obtain support from the Cabinet to float the price of oil products in line with international oil prices," Pan said.

"If oil prices can be determined by market mechanisms, I believe CPC will earn more than NT$2 per share after privatization," he said.

The state-run oil refiner raised wholesale gasoline and diesel oil prices by NT$2 per liter in April because of soaring crude oil prices.

The hike did not stem the company's losses, however, as CPC reported a NT$17.4 billion deficit for the first four months of the year.

Following the oil price rises, CPC has been waiting for the Cabinet's approval to raise the price of natural gas, but Su's reply indicated that CPC would have to wait a little longer.

"The government needs to take the likelihoods of the 23 million people of Taiwan into account," Su said.

"Gasoline prices should be decided by the market, but should not be allowed to heavily influence consumer prices in the meantime," he said.

Separately, CPC is inviting bids for a 25-year contract to transport liquefied natural gas from Qatar starting in 2008.

Competitors for the agreement, estimated to be valued at NT$86.9 billion (US$2.7 billion), must enter their bids by 5pm on June 8, according to the tender document.

Only companies that have operated LNG tankers for at least 10 years will be accepted, according to the document.

"It has to be an international tender," Lin Cheng-hsiung (林正雄), vice president of CPC, said yesterday. "We want the winner to be experienced."

Bidders may come from Japan, South Korea or Europe, Lin said, declining to name any potential partners.

CPC plans to pick a winner "as soon as possible," he said, without elaborating.

Taiwan Maritime Transportation Co (台灣海陸) is interested in bidding for the contract, said Danny Wang, a spokesman for the Taipei-based shipping company, which operates about 55 vessels.

CPC has plans to set up two companies with the successful bidder, Lin said.

The first joint venture, in which Qatar Gas Transport Co is also taking a stake, will acquire four LNG tankers, while the second will operate the vessels to ship the fuel from Qatar, Lin said.

Qatar Gas Transport is the largest shipper of liquefied natural gas in the Middle East.