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CPC says oil reserves sufficient

A sign at a Formosa Petrochemical Corp gas station in Taipei yesterday announces that the station maintains the same gas prices as competitor CPC Taiwan despite a Formosa Petrochemical announcement that the company is increasing its prices. PHOTO: LU CHUN-WEI, TAIPEI TIMES

State-run CPC Corp, Taiwan (CPC, 台灣中油) said in a statement yesterday that it had sufficient oil reserves and would maintain an adequate supply of fuel. The company also said it also would not borrow oil products from domestic rivals.

The company's remarks came after rival Formosa Petrochemical Corp (台塑石化) on Saturday raised its gasoline and diesel prices by NT$2.8 and NT$3.1 per liter in a bid to reflect rising international crude oil prices.

After the Cabinet decided to continue freezing the nation's fuel and utility prices until May 20 many motorists have deserted Formosa pump stations to fill their vehicle tanks at CPC stations.

Formosa Petrochemical's retailer National Petroleum Corp (NPC, 全國加油站), which raised its fuel prices by the same amount as Formosa Petrochemical on Saturday, saw a huge drop in customers over the weekend.

One of NPC's gas stations, located on Taipei's Minchuan E Road Sec 6, said sales on Saturday dropped by nearly 55 percent from their normal 20,000 liters to only 9,000 liters of gasoline.

On the contrary, a CPC gas stations located on Taipei's Neihu Rd, Sec 1, said sales on Saturday grew by 53.85 percent from a normal level of 26,000 liters to 40,000 liters of gasoline.

Despite Formosa Petrochemical's price hikes, its retailer Cocosure (西歐加油站), which opened the nation's first privately-owned gas station on Zhongshan N Rd Sec 5 (in Taipei's Shilin District), was hesitant to increase its prices at the weekend, but said the company would hold a meeting today and decide whether to raise its fuel prices.

There is increasing pressure on CPC to hike fuel prices, as losses increase owing to soaring international crude oil prices, with oil costs exceeding net prices of gasoline and diesel.

As this month's international crude oil prices were on average US$8 per barrel higher than a month ago, the company estimated that its losses could grow by 40.63 percent from NT$6.4 billion (US$210.51 million) last month to NT$9 billion this month.

"Now the question is whether a state-run enterprise [CPC] will be dragged down by the government's decision to freeze fuel prices until May 20," Liao Tsang-long (廖滄龍), deputy director of CPC's industrial relations division, said yesterday.

To meet the expected surge in demand for CPC's oil products, Liao said the company had decided to prioritize domestic supply, and ordered a halt in export sales for both next month and May. Furthermore, CPC still has a storage amount of two months.

"If our storage amount is still insufficient, CPC will import oil products from overseas. CPC currently does not take cost into consideration," Liao said.
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