MOEA mum on new oil price formula

By Helen Ku  /  Staff reporter

Fri, Jul 12, 2013 - Page 13

The Ministry of Economic Affairs (MOEA) yesterday remained mum on when it will implement a revised oil price formula, after two research institutes completed their studies on the pricing mechanism on Wednesday.

According to the Taiwan Research Institute’s (TRI, 台綜院) and the Taiwan Institute of Economic Research’s (TIER, 台灣經濟研究院) reports, a revised formula for state-run oil refiner CPC Corp, Taiwan (CPC, 台灣中油) will be based on 65 percent of Dubai crude oil and 35 percent of Brent crude.

CPC’s current formula is based on 70 percent of Dubai oil and 30 percent of Brent oil.

The two think tanks also suggested CPC fix its operating expense to avoid overcharging consumers. Consumers have often complained the CPC has raised its prices even when global crude oil prices fell, because the company’s operating expenses have varied from time to time.

The ministry appeared dissatisfied with the reports and asked for further input from two think tanks.

“CPC may adopt suggestions offered by the TRI and TIER in the future and may publicize more information to consumers in order to reduce their concerns,” the ministry said in a statement.

In a bid to avoid causing a panic, the ministry did not say when CPC would begin using the new pricing formula as the revised formula is likely to increase consumers’ fuel expenses.