CPC risks making NT$18 billion loss

CPC Corp, Taiwan (CPC, 台灣中油) may make a loss of NT$18 billion (US$554 million) in the first quarter if the government continues to prevent the state-run oil refiner from raising fuel prices to help slow inflation, a company official said.

The ceiling on gasoline and diesel prices, imposed in November, may last through March, Liao Tsang-long (廖滄龍), a spokesman for CPC, said by telephone from Taipei yesterday. The company recorded a pretax profit of NT$6.93 billion in the first three months of last year, according to the State-owned Enterprise Commission Web site.

"CPC will comply with government policy to help stabilize consumer prices as we are a state-run enterprise," Liao said.

CPC may fail to reach its net profit forecast of NT$5.2 billion for this year because of government price controls and soaring costs, Liao said.

Crude oil traded near a record in New York after reaching US$100 a barrel for the first time on Wednesday. Taiwan imports more than 99 percent of its oil needs.

CPC's loss widened to NT$6 billion last month from NT$200 million in November, Liao said. The Cabinet in November imposed a ceiling on gasoline and diesel prices after inflation quickened to a 13-year high.

The refiner posted a pretax profit of NT$15.5 billion last year, Liao said. That fell short of a government forecast of NT$18.1 billion.