Gas stations supplied by the Chinese Petroleum Corp (中油) and Formosa Petrochemical Corp (台塑) yesterday decided to slash their pump prices in central Taiwan in response to cuts by National Petroleum Corp (全國), the independent chain.
Executives of 48 stations supplied by Chinese Petroleum across the nation's central regions including Taichung, Nantou, Changhwa and Yunlin agreed yesterday to lower their prices for gasoline by NT$2.2 and NT$0.8 for diesel.
The price reduction effectively undercuts National's gasoline price by NT$0.2 which lowered its prices in 19 stations across these areas by NT$2 on Monday.
The NT$0.8 cut to diesel prices matches that made by National.
Executives from Chinese Petroleum and Formosa met early yesterday with their counterparts from National in an attempt to convince the gas-station chain to abandon a price-cutting campaign on fuel.
As of yesterday evening National was charging NT$17 per liter for 95 unleaded and around NT$12.9 per liter for diesel at the 19 stations, while Formosa and Chinese Petroleum were charging around NT$19 per liter and around NT$14.5 per liter for diesel.
Formosa and Chinese Petroleum executives reportedly asked National yesterday to cease and desist with the promotion or they would use their stations located near the 19 National stations to "bleed them to death."
The stations supplied by Chi-nese Petroleum and Formosa are expected to lower prices this morning.
TVBS television yesterday showed long lines of motorists waiting to fill their tanks at the Nat-ional stations with the discounted rates, while nearby Chinese Petroleum-supplied stations appeared quiet.
The media speculated that the localized price war could spread around the nation by the middle of next month as gas station chains and suppliers fight for market dominance.
* 48 stations supplied by Chinese Petroleum will lower their prices today by NT$2.2 for gasoline and NT$0.8 for diesel.
* The move is aimed at undercutting national Petroleum, which cut prices at 19 stations by NT$2 Monday.
* The NT$0.8 cut to diesel prices matches that made by National.
Last month Formosa and Chinese Petroleum went head-to-head around the greater Taipei area, where a handful of stations supplied by either of the two oil giants consecutively slashed prices.
That skirmish was called off after only a few days as both stations and suppliers felt the bite of mounting losses.
A National spokeswoman said the company was still considering the threat but said that the price cuts in combination with customer giveaways and lucky draws had already been factored into the NT$300 million promotional budget for the remainder of the year.
"To cut the sales promotion, including the price cuts, would unravel our operating plans for the September to December period," she said.
As National buys its gasoline and diesel products from Formosa, it's strategy is not to go head-to-head with the gasoline suppliers but instead with retailers, she said.
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