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State-run oil supplier fights back after competitor cuts fuel prices

State-run oil supplier fights back after competitor cuts fuel prices

Taipei, March 15 (CNA) State-owned petroleum refiner CPC Corp., Taiwan adjusted its fuel prices lower than expected on Sunday in response to a price war waged by its only competitor in the market, the privately-run Formosa Petrochemical Corp. Under a floating pricing mechanism used by CPC, domestic fuel prices were estimated to drop NT$0.5 (US$0.02) to NT$0.6 per liter next week after a rise of NT$0.2 a liter this week. Earlier on Sunday, the company announced a cut of NT$0.7 per liter for both gasoline and diesel prices. As a result, CPC prices at the pump would be NT$22.6 per liter for super diesel, NT$24.5 for 92 octane unleaded gasoline, NT$26 for 95 octane unleaded gasoline, and NT$28 for 98 octane unleaded gasoline. The adjusted prices will take effect from midnight. The unexpected price cuts came after Formosa Petrochemical took the lead to slash fuel prices by NT$0.5 to NT$0.8 per liter at 1:00 a.m. Sunday, catching CPC in surprise in an apparent price war. With its blitzkrieg annoucement, Formosa's new fuel prices are: NT$22.2 per liter for super diesel, NT$24.4 for 92 octane unleaded gasoline, NT$25.9 for 95 octane unleaded gasoline, and NT$28.2 for 98 octane unleaded gasoline. Just 23 hours later, CPC managed to be competitive on 98 octane unleaded gasoline with a NT$0.2 per liter edge over Formosa. CPC executives admitted that Formosa's price cuts would affect CPC's sales. The state-owned supplier adjusts domestic fuel prices on a weekly basis according to movements in a weighted oil price formula consisting of 70 percent Dubai crude and 30 percent Brent crude. The price of crude oil under the formula was US$55.99 per barrel on average this week, down from US$58.84 the previous week, according to CPC's website. Formosa waged the battle in February for the first time in six years, when both the fuel vendors of the country had adjusted gasoline and diesel prices by nearly identical margins. (By Huang Chiao-wen and Elizabeth Hsu)


Updated : 2021-09-20 06:33 GMT+08:00