Private oil refiner Formosa Petrochemical Corp (台塑石化) announced yesterday it would cut domestic gasoline and diesel prices by NT$0.30 per liter, effective at 5pm yesterday, a day after the Ministry of Economic Affairs forced state-run CPC Corp, Taiwan (CPC, 台灣中油) to drop prices by NT$0.40 per liter.
The latest price adjustment was also Formosa Petrochemical’s second price cut this week, amid a public uproar over discrepancies in air pollution fees that the refiner submitted to the Environmental Protection Administration (EPA) and those it collected from motorists at the pump.
Including a reduction of NT$0.20 per liter announced on Monday night, Formosa Petrochemical’s price cut this week brings its total price drop on par with CPC’s at NT$0.50 per liter.
Formosa Petrochemical chairman Wilfred Wang (王文潮) said yesterday the company had not overcharged motorists in collecting air pollution fees, but was obliged to cut oil prices in the face of market competition.
“It is an international joke,” local cable TV network UBN quoted Wang as saying at a press conference yesterday, referring to the two refiners’ recent price cuts despite their increased costs in upgrading refining process technology.
As the air pollution fees and various taxes already figure in the calculation of the so-called floating prices for fuel, Wang said it was the floating price formula that caused public complaints.
“We cannot agree with accusations that we have colluded with other companies to overcharge consumers,” he said.
Meanwhile, the Ministry of Economic Affairs’ Web site quoted Bureau of Energy Deputy Director-General Wang Yunn-ming (王運銘) yesterday as saying that the floating oil price formula was not designed to allow refiners to overcharge consumers.
Wang said the ministry would continue reviewing the mechanism to avoid public misunderstanding.
In a press release last night, the EPA said its investigation showed that CPC had overcharged consumers by a total of NT$2.5 billion (US$77.96 million) between 2006 and last year by adopting the floating oil price formula.
It also found that CPC had followed regulations and paid NT$4.6 billion in air pollution fees to the EPA.
The EPA said that CPC had adopted a new and more reasonable formula to calculate the air pollution fee this year.
On average, the air pollution fee for gas is NT$0.0923 per liter. The air pollution fee for diesel is NT$0.1291 per liter.
ADDITIONAL REPORTING BY SHELLEY SHAN
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