Formosa Petrochemical Corp (台塑石化), the nation’s only publicly traded oil refiner, said yesterday it would raise gasoline and diesel prices by NT$1.1 and NT$1.3 per liter respectively beginning today.
Following the latest price adjustment, the retail prices are now NT$36.10 for 98-octane unleaded gasoline, NT$34.60 for 95-octane unleaded gasoline, NT$33.90 for 92-octane unleaded gasoline and NT$31.90 for premium diesel at both Formosa Petrochemical and its sole rival, CPC Corp, Taiwan (CPC, 台灣中油) gas stations.
Formosa Petrochemical’s move came one day after state-owned CPC raised its gasoline and diesel prices by NT$3.90 and NT$4.40 per liter respectively on Tuesday.
The last time Formosa Petrochemical had raised its gasoline and fuel prices — by NT$2.8 and NT$3.1 per liter respectively — was on March 29 to reflect rising international crude oil prices, while CPC had frozen its prices since December as part of a plan by the former Democratic Progressive Party government to contain inflationary pressures.
During the past two months, Formosa Petrochemical has seen its domestic market share drop to less than 5 percent from the previous 22 percent as most motorists deserted Formosa pump stations to fill at CPC stations. The company, however, enjoys a higher export ratio.
While the company has hoped to reclaim its domestic market share following the latest changes. The adjustments still cannot fully reflect the rise in its purchasing costs and international market prices, Lin Keh-yen (林克彥), company spokesman and director of the president’s office, said at a press conference yesterday.
To ensure the survival and competitiveness of the company’s gas stations, Formosa Petrochemical had little choice but to match CPC prices, Lin said.
The nation’s gasoline and diesel prices are still the lowest in the region even after the price adjustment, the company said in its statement.
Shares of Formosa Petrochemical dropped 2.7 percent to close at NT$90.60 on the Taiwan Stock Exchange yesterday, before it announced its price adjustments.
In a client note yesterday, Citi Investment Research analyst Oscar Yee maintained his “hold” rating on Formosa Petrochemical shares, citing its expensive valuation. The Hong Kong-based analyst said that given the record-high mid-distillate crack spreads against fuel oil, he expected the company to deliver a strong set of second-quarter results.
Meanwhile, Taiwan cut the commodity tax on gasoline and diesel that producers and importers pay by 19 percent and 35 percent respectively to help ease the economic impact of surging fuel costs.
The reduced tax rate took effect yesterday and will be current until Nov. 27, the Ministry of Finance said in a statement on its Web site. Producers and importers will pay a commodity tax of NT$5.53 a liter on gasoline and NT$2.59 a liter on diesel after the cut.