CPC Corp, Taiwan (CPC, 台灣中油) yesterday said it would not raise gasoline and diesel prices again this year, despite rising international oil prices, to help keep domestic price levels stable.
The state-owned oil refiner normally adjusts its prices at the pump weekly depending on fluctuations in global crude oil markets.
Had it done the same this week, fuel prices would have reached their highest level since October 2014, the company said.
The company initially announced that it would increase prices by NT$0.5 per liter, even though they should have risen by NT$1.2 per liter based on its standard formula, and it would absorb the difference to help keep commodity prices in check.
However, at about noon, the company backtracked, and said it would cap prices at the current level until the end of this year.
It did not explain the sudden change of heart, other than to say it was worried about the impact of higher fuel prices on inflation.
However, CPC vice president Huang Jen-hung (黃仁弘) denied the move had anything to do with politics.
The decision came about seven weeks ahead of the nine-in-one elections on Nov. 24.
Domestic fuel prices have risen for seven weeks in a row after global crude prices soared 18.57 percent from US$70.61 per barrel on Aug. 20, CPC said.
Huang estimated it will cost the company an estimated NT$300 million (US$9.73 million) to absorb the full brunt of the fuel price hike for the coming week.
However, he said it would be difficult to estimate the cost of to the company of keeping the cap in place to the end of the year, because of the unpredictable nature of global oil prices.
Huang would only say that CPC hopes oil prices will remain stable in the short term to limit its losses.
Investors and analysts are beginning to anticipate the possibility that oil will hit US$100 a barrel during the peak winter demand period — which runs from late this year to early next year — the firm said.
Oil-producing countries and OPEC members see US$70 to US$80 per barrel as an ideal price range and could increase production to keep prices in that range, CPC said.
Privately run Formosa Petrochemical Corp (台塑石化) yesterday said it would also keep its fuel prices for this week unchanged in line with the government’s policy to help stabilize commodity prices.
However, it would have to evaluate whether it could maintain a price freeze to the end of the year, Formosa executive vice president Lin Keh-yen (林克彥) said.
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