The Cabinet has no plan to increase oil prices despite the "strong recommendation" of the Ministry of Economic Affairs, Executive Yuan Spokesman Shieh Jhy-wey (謝志偉) said yesterday.
"We understand the considerations of the Ministry of Economic Affairs and CPC Corp, Taiwan [CPC,
Shieh said the Cabinet's only consideration was to minimize the impact of rising international oil prices on people's lives and that this policy remained consistent with what it had been before the presidential election.
Shieh made the remarks after attending a meeting at which the matter was discussed.
The Executive Yuan said on March 24 that the state-run CPC Corp, Taiwan would maintain its oil prices at current levels until the new president has been sworn in on May 20.
CPC's rival Formosa Petrochemical Corp (台塑石化) raised its gasoline and diesel prices on Saturday.
Minister of Economic Affairs Steve Chen (陳瑞隆) yesterday told the legislature's Economics Committee that the ministry would "strongly recommend" to the Executive Yuan that it agree to increase oil prices at an appropriate time.
Some Chinese Nationalist Party (KMT) legislators yesterday asked Chen to prove that he had the guts to push through the ministry's recommendation, even if this meant he might lose his job.
Chen said in response that fear of losing his job had never been a factor in the performance of his duties since the day he took office.
Shieh yesterday asked KMT lawmakers to refrain from pressuring Chen, and said the ministry was just doing its job.
The ministry reiterated yesterday that the state-run refiner could continue to fully supply the local market for another two months if necessary.
CPC has revealed that demand at its filling stations has risen by 30 percent for gasoline and 34 percent for diesel over the past three days, which it described as a clear indication that many customers are turning to CPC because of its lower prices.
"The ministry anticipated that Formosa would raise its prices and that consumers would subsequently switch to CPC," Chen told the committee.
CPC has sufficient oil reserves to satisfy gasoline demand for another 64 days, and diesel for another 75 days, even if all of Formosa's customers were to switch to CPC, he said.
Formosa has an estimated 20 percent share of the local market.
Chen rejected speculation that the company would need to borrow money to import more oil to meet demand.
A CPC official said yesterday that the company had recorded a 20 percent rise in demand at its pumps and franchises in the last three days, and stated that it was urgent that the fuel price cap be removed.
"If all of Formosa Petrochemical's customers switched to CPC ... the company could hang on for about another two months," Liao Tsang-long (廖滄龍), deputy director of the company's Industry Relations Division, told CNA.
He said market expansion could not compensate for the losses the company incurs as a result of the price cap.
CPC recorded losses of NT$20 billion (US$658.7 million) during the last five months.
"The more we sell, the more we lose," Liao said.
While the company planned a single price hike of NT$4 per liter of gasoline and NT$4.5 per liter of diesel, the recent appreciation of the New Taiwan dollar would offset the rise, Liao said.
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