Taiwan refiners raise wholesale prices as war looms

The price of gasoline at the pumps could soon rise after Formosa Petrochemical Corp (台塑石化), the nation's second-largest oil refiner, said yesterday it would raise wholesale oil prices, reflecting soaring international oil prices as the prospect of a war in Iraq grows more likely.

Two other refiners said they would follow suit.

"To avoid irrational hoarding in the market, Formosa Petrochemical decided to raise the wholesale price of gasoline by NT$1.5 and diesel by NT$1.0 per liter," said Su Chi-yi (蘇啟邑), a Formosa Petrochemical spokesman.

The new prices went into effect at midnight last night, the company said. Station operators are free to set retail prices as they see fit.

Oil prices yesterday hovered around US$37 a barrel after US Defense Secretary, Donald Rumsfeld, said his forces were ready to attack Iraq if US President George W. Bush gave the go ahead.

Rivals Chinese Petroleum Corp (中油) and Esso Petroleum Taiwan Inc (台灣埃索) announced late last night that they would match Formosa Petrochemical's price hikes, citing higher crude oil prices.

Esso Petroleum is a joint venture between ExxonMobil and Pan Overseas Corp (匯僑).

"The [oil] cost pressure is growing," said Liao Tsang-long (廖滄龍), Chinese Petroleum's spokesman. "The war in Iraq looks inevitable."

The state-run company has not ruled out the possibility of more price hikes in the future, pending further developments in Iraq, Liao said.

Chinese Petroleum chairman Kuo Chin-tsai (郭進財) said on Wednesday that the company would incrementally raise prices to reflect market trends.