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Chinese Petroleum set to raise gasoline prices

"We will hold the pump prices steady this week ? but price adjustment may happen soon."

Pan Wenent, chairman of Chinese Petroleum

With prices of crude oil registering a record high of nearly US$70 a barrel, state-run Chinese Petrol-eum Corp (CPC) will raise gas prices as soon as next week, chairman Pan Wenent (潘文炎) said yesterday.

"We will hold the pump prices steady this week... but price adjustment may happen soon -- any time after this week," Pan said on the sidelines of his inauguration ceremony.

Pan did not indicate the range of the proposed hike yesterday. But he said CPC would take the lowest gasoline prices in neighboring countries into consideration and would not raise rates to the same levels as South Korea and Japan immediately.

As of the end of Wednesday, the lowest wholesale price for 95-octane unleaded gasoline regionally was in South Korea, priced about NT$6.29 per liter higher than in Taiwan, he said.

The lowest prices for 92-octane unleaded gasoline and top-grade diesel were in Japan as of the end of Wednesday, he said, adding that gas was priced NT$2.73 per liter lower than in Taiwan, while diesel was NT$2.39 per liter lower than in the local market.

Pan, 61, took over the chairmanship from Kuo Chin-tsai (郭進財), who left in January to become chairman of Kuo Kuang Petrochemical Technology Corp. Pan began working at CPC in 1982 and in 1996 was promoted to president. In 2004, he was appointed chairman of Kuo Kuang Power Co.

At yesterday's swearing-in ceremony, Pan pledged to help push Taiwan's gasoline price policy to conform with market mechanisms, enhance the nation's competitiveness and stabilize consumer prices.

CPC, Taiwan's largest oil refiner, reported a deficit of NT$13.8 billion (US$424.64 million) for the first quarter of the year, and losses may widen to more than NT$50 billion by the end of this year if the company continues to sell gasoline at the current rates, Pan said.

To ensure that the nation's gasoline prices reflect costs, Minister of Economic Affairs Morgan Hwang (黃營杉), who attended yesterday's swearing-in ceremony, said he hoped CPC would come up with a formula for price adjustments.

Privately owned oil refiner Formosa Petrochemical Corp, which has a 30 percent share of the market, is also evaluating raising wholesale gasoline prices, said Matiz Lin (林明憲), a public relations official at the firm.

Formosa Petrochemical reported sales of NT$109.49 billion for the first quarter of the year, up 12.55 percent from the previous year.

Thirty-five percent of Formosa Petrochemical's gasoline is used in the local market, while 65 percent is exported, which the company uses to compensated for losses in the local market, Lin said.
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