The Democratic Progressive Party (DPP) caucus yesterday blasted the Ministry of Economic Affairs for its new fuel pricing formula, saying that the new calculation is unfair and will increase consumers’ financial burden.
The state-owned oil refiner CPC Corp, Taiwan, currently uses a weekly floating price scheme pricing its fuel products 70 percent based on Dubai crude oil prices and 30 percent on Brent crude oil prices. The ministry wants to increase the percentage of international crude price changes calculated in fuel pricing from 80 percent to 100 percent and change the calculation base to a split of 65 percent of Dubai crude oil price and 35 percent of Brent crude oil.
The DPP caucus says the new formula will consist of crude purchase cost, which accounts for 86 percent of the future oil price and will be adjusted weekly, and the company’s operational cost, which accounts for 14 percent of the oil price and will be adjusted annually.
“The ministry is adding fuel to the fire with the new calculation formula because the real flaw of the calculation was CPC’s opaqueness in its crude purchase cost, which is still not transparent. Worse yet, operational cost — another aspect which lacks transparency — is now being added to the pricing formula,” DPP Legislator Gao Jyh-peng (高志鵬) told a news conference.
DPP Legislator Wu Ping-jui (吳秉叡) added that CPC was corrected by the Control Yuan last year for its poor management, further discrediting the company for making operational costs part of the formula.
“It is unbelievable that the poorer the company’s management is, the higher the fuel price goes,” Wu said.
Tseng Pei-ju (曾珮如), an official from the Bureau of Energy, said the formula has not been finalized, but that the new mechanism would fully reflect the international crude price and increase transparency.