Fuel prices are set to move sharply higher next week, with 92-octane unleaded gasoline expected to cost almost NT$30 (US$1.08) per liter on the back of rising international crude oil prices amid concerns over geopolitical tensions between Ukraine and Russia.
The hike in crude prices on the global market is expected to prompt state-run CPC Corp, Taiwan (中油) to raise its gasoline and diesel prices by NT$1.2 and NT$1.4 per liter respectively.
If CPC adjusts fuel prices as forecast, prices at its pumps would increase to NT$27.4 per liter for super diesel, NT$29.9 per liter for 92-octane unleaded, NT$31.4 per liter for 95-octane unleaded and NT$33.4 per liter for 98-octane unleaded, sources said.
The global oil market has seen volatility in the past few sessions as fears over the potential for conflict between Russia and Ukraine continues to grow.
In addition, strong global demand for energy in the wake of an economic recovery has also pushed up crude prices.
In a recent research note, JPMorgan Chase forecast crude prices could “easily” soar to US$120 per barrel as tensions between Russia and Ukraine escalate.
On Thursday, March futures for Brent crude in London, the global benchmark, were US$91.41 per barrel, while West Texas Intermediate in New York closed at US$89.88 per barrel.
CPC calculates its weekly fuel prices based on a weighted oil price formula made up of 70 percent Dubai crude and 30 percent Brent crude.
Based on fluctuations in international crude prices, CPC calculated the average price at US$92.3 per barrel as of Thursday, an increase of US$2.09 from a week earlier, it said on its Web site.
In addition, the New Taiwan dollar depreciated by NT$0.074 against the US dollar from a week earlier.
Only taking into account these factors, next week’s hike by CPC would be as high as NT$1.7 per liter for gasoline and NT$3.3 for super diesel.
However, to meet the government’s requirement to keep local fuel prices lower than in other countries in the region, such as South Korea, Hong Kong, Singapore and Japan, the state-owned company is expected to absorb part of the impact resulting from rising international prices.
That would result in a likely increase in diesel and gasoline prices of NT$1.2 and NT$1.4 per liter.
CPC and Formosa Petrochemical Corp (台塑石化) are scheduled to announce their price changes tomorrow.
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