Minister of Economic Affairs Chang Chia-juch (張家祝) yesterday said a modified fuel pricing formula used by state-run refiner CPC Corp, Taiwan (CPC, 台灣中油) would be announced in May at the earliest.
“We are aware of the public’s sentiment toward the current fuel pricing mechanism. We will try to come up with a fairer pricing system,” Chang told the legislature’s Economics Committee.
The ministry last month sought consultation from two market research houses — the Taiwan Institute of Economic Research (台灣經濟研究院) and Taiwan Research Institute (台灣綜合研究院) — about CPC’s pricing formula.
The two institutes were asked to deliver their proposals within three months and the ministry will then work on improving CPC’s pricing mechanism, Chang said.
However, when asked by legislators if CPC could incorporate “misery indices” — the nation’s unemployment rate and inflation rate — while amending its pricing formula, Chang said the suggestion was impractical.
“It is diffcult for CPC to factor in ‘misery indices’ when setting prices for fuel. We will carefully redesign the formula and make a thorough review of it,” he said.
Meanwhile, CPC chairman Lin Sheng-chung (林聖忠) said the company currently priced its fuel products based 70 percent on Dubai crude oil prices and 30 percent on Brent crude oil prices.
CPC reviews the two measures and makes adjustment to fuel prices on a weekly basis.
Lin said based on barrels purchased by CPC, the company is to make adjustments to its formula and may lower the percentage of Dubai crude oil to 65 percent and increase the Brent crude oil ratio to 35 percent.