Middle East crisis prompts fuel, oil hike

Amid concerns that Middle East oil supplies may be disrupted, the state-run Chinese Petroleum Corp (中油) said it is raising domestic gasoline and diesel fuel prices by an average of 5.19 percent, and domestic fuel oil prices by an average of 3.11 percent, effective today.

Unleaded 98 octane gasoline will be hiked to NT$20.5 per liter from NT$19.4, while premium-grade diesel fuel will jump to NT$13.8 per liter from NT$13.3, Chinese Petroleum said yesterday in a statement.

The unleaded 95 and 92 octane gasoline will also see prices increase by NT$1 per liter each to NT$19.2 and NT$18.1, respectively.

"In view of rising international oil prices, we must quickly [react] to dispel market expectations, which in turn will allow more room for change in future oil prices," the company said.

Chinese Petroleum announced the price hikes in the wake of an Iraqi announcement that it will cut off oil exports for one month in protest of Israel's military incursion into the Palestinian territories.

Last night Formosa Petrochemical Oil Corp (台塑石油) said that it would match the CPC's price increases.

The Ministry of Economic Affairs, however, downplayed the impact of the Israeli-Palestinian conflict on the industry.

According to the ministry, Chinese Petroleum and Formosa Petrochemical have a total of 111 days worth of oil reserves. In addition, the ministry has instructed both the Energy Commission and the state-run oil company to closely monitor the conflict in the Middle East and contact suppliers in other regions should supply problems suddenly emerge.

Taiwan relies on imports from the Middle East and West Africa for most of its crude oil needs. Currently, oil from Iraq accounts for a mere 3.3 percent of the nation's oil imports, the ministry said.

Meanwhile, Taiwan Power Co (台電) Chairman Lin Wen-yuan (林文淵) said yesterday that the state-run company has no plans at the moment to raise electricity prices.