A rebound in international crude oil prices and the depreciation of the New Taiwan dollar against its US counterpart mean that domestic gasoline and diesel prices will both edge up NT$0.5 per liter today.
The price increase follows three consecutive weekly decreases since the beginning of this month when the method by which domestic oil prices are calculated was implemented on a weekly, rather than monthly, basis.
State-run oil refiner CPC Corp, Taiwan (CPC, 台灣中油) and rival Formosa Petrochemical Corp (台塑石化) both increased their domestic oil prices by the same amount.
Following the price increase, the retail price for 98-octane unleaded gasoline is NT$35 per liter, 95-octane unleaded gasoline is NT$33.5 per liter, 92-octane unleaded gasoline is NT$32.8 per liter and diesel is NT$30.6 per liter.
Crude oil prices remained volatile this week as Tropical Storm Gustav approached the Gulf of Mexico, traders remaining concerned that the storm could damage oil facilities in the area. It is estimated that the situation will become clearer today.
“If Tropical Storm Gustav continues to strengthen and move toward the New Orleans area, it will significantly impact the area and a lot of people are afraid that there will be a replay of the Hurricane Katrina incident [in 2005],” Liang Kuo-yuan (梁國源), president of the Polaris Research Institute (寶華綜合經濟研究院), said by telephone yesterday.
Liang estimated that international crude oil prices would likely average between US$100 and US$130 a barrel this year. However, if the storm directly hits the Gulf of Mexico, which plays an important role in US domestic oil production, the price could increase to as high as US$140 a barrel, he said.
Global crude oil prices have tumbled since hitting record highs above US$147 a barrel on July 11. Cheng Cheng-mount (鄭貞茂), chief economist at Citigroup Inc in Taiwan, said inflationary pressures would gradually ease during the coming months.
“We estimate that this month’s headline CPI inflation likely eased from its 12-year high last month. Inflationary pressure eased mainly on lower diesel and gasoline prices,” he wrote in a client note yesterday.
The government’s statistics bureau is scheduled to release the latest inflation data on Friday. Citigroup estimates the consumer price index will rise 4.3 percent this month from a year earlier, after the index rose 5.92 percent last month year-on-year.
Additional reporting by Kevin Chen
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