Formosa Petrochemical cuts prices on petroleum products
2003-01-16 / Taiwan News, Staff Reporter / By Lisa Wang Formosa Petrochemical Corp., a unit of the Formosa Group, announced unexpected price cuts on local petroleum products yesterday, saying that high international crude oil prices could level off again in the near future in view of OPEC's decision to increase output.
Local petroleum giant Chinese Petroleum Corp., however, decided to keep its prices steady saying that international crude prices will continue to fluctuate, hitting a high of US$32 per barrel.
"We do not see any room for price cuts in the short term," the state-run company said in a statement.
Though crude oil prices climbed on fears of a U.S.-Iraq war and the prolonged oil workers strike in Venezuela, private oil provider Formosa said it expected prices to fall in reaction to the Organization of Petroleum Exporting Countries' promise to raise production quotas.
Formosa cut the price of its unleaded gasoline by NT$0.5 per liter. The new retail prices of 98 unleaded gasoline, 95 unleaded gasoline and 92 unleaded gasoline are NT$21.4, NT$20.1 and NT$19.4 per liter, respectively. Diesel has also been reduced by NT$0.2 per liter to NT$15.5. The new prices take effect today.
In response to Formosa's price cuts, the CPC authorized its gasoline stations to adopt flexible measures with regard to price.
CPC's gas stations are allowed to revise gasoline prices downward by a maximum of NT$0.8 per liter, said Liao Tsang-long (
"I believe most of our gas stations will follow our rival's NT$0.5 reduction," said Liao.
National Petroleum Corp. also said yesterday it would follow suit.
The last petroleum price adjustments were recorded on January 9 when CPC and Formosa raised gasoline prices and diesel by NT$0.5 per liter and NT$0.2 per liter respectively. Formosa's latest price cut has brought petroleum prices back to the pre-January 9 level.
Amid fierce competition in the wake of market liberalization, price adjustments by local petroleum providers have been in tandem, in a bid to prevent a potential loss of customers.
However, such price strategies recently drew the attention of the Fair Trade Commission, which warned the island's three largest petroleum providers - China Petroleum Corporation, Formosa and Esso Petroleum Taiwan Inc. - that joint price adjustments could risk breaching fair trade laws.