State-run oil refiner CPC Corp, Taiwan (CPC, 台灣中油) could be privatized by 2016 — during President Ma Ying-jeou’s (馬英九) second term — if the company’s labor union agrees, CPC chairman Chu Shao-hua (朱少華) said yesterday.
On Wednesday, Ma said the government had not ruled out privatizing CPC. He assigned the Ministry of Economic Affairs to evaluate the possibility in response to complaints about the loss-making firm’s operations and inappropriate benefits.
Ma’s remark raised the concerns of many members of the legislature’s Economics Committee during a question-and-answer session with Minister of Economic Affairs Shih Yen-shiang (施顏祥) and CPC officials.
“Personally, I support the view that CPC should be privatized,” Shih said in the session yesterday.
“We are continuing the -communications with labor union -representatives by holding conferences and private visits,” Chu said. “[I believe] we have obtained some positive responses.”
Chu said the company could finish all the preparation procedures for privatization in two years once the labor union approves the plan, an indication that CPC could privatize before the end of Ma’s second presidential term in 2016.
In the initial stage, the government will remain the largest shareholder of the company, with other shares sold to specific enterprise investors, company employees and the general public, Chu said.
The company might also offer some preferential stock warrants to CPC employees to seek the labor union’s support for the privatization, Chu added.
However, Taiwan Solidarity Union Legislator Hsu Chung-hsin (許忠信) said he did not believe CPC’s privatization would benefit the nation and the public.
“President Ma is like a layman who attempts to lead the expert,” Hsu said.
Once the company privatizes, Hsu said the nation’s fuel prices might rise even higher because CPC and Formosa Petrochemical Corp (台塑石化) would make an oligopolistic market that could manipulate prices more easily.
However, Shih said CPC’s privatization might help domestic fuel sales return to market mechanisms, with the government serving as an overseer to monitor behavior associated with price-fixing.
Meanwhile, several lawmakers asked the ministry to draft an amendment to the Petroleum Administration Act (石油管理法) that would make Formosa Petrochemical more responsible for domestic oil sales.
Under the current act, the government can only restrict Formosa Petrochemical from exporting oil products when the local supply of oil is insufficient.