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Domestic fuel prices forecast to rise next week

Domestic fuel prices forecast to rise next week

Taipei, April 29 (CNA) Domestic gasoline and diesel prices are expected to move higher next week as international crude oil prices have been rebounding amid a weaker U.S. dollar, market sources said Friday.

The recent rise in international crude oil prices points to an increase in fuel prices next week by state-run oil refiner CPC Corp. Taiwan based on its fuel price calculation formula, the sources said.

They forecast that the price of the benchmark 95 octane unleaded could breach NT$24 (US$0.74) per liter.

CPC is expected to raise domestic gasoline prices by NT$0.4-NT$0.5 per liter and diesel prices by NT$0.5-NT$0.6 per liter next week, marking the third consecutive weekly increase in fuel prices, the sources said.

CPC calculates its weekly fuel prices based on a weighted oil price formula that comprises 70 percent Dubai crude and 30 percent Brent crude.

One of the factors informing the expected fuel price hike is the relative weakness of the U.S. dollar, the sources said.

On Wednesday, the U.S. Federal Reserve decided to leave its key interest rates unchanged after a rate increase in December, slowing the pace of its rate hike cycle.

The Fed decision sent the U.S. dollar lower, which boosted to international crude oil prices the same day, with West Texas Intermediate crude in New York hitting US$45 per barrel for the first time since November.

Crude oil prices were also boosted by a drop in U.S. oil production for the 13th consecutive week. According to the U.S. Energy Information Administration, crude oil production in the country fell by 15,000 barrels per day to 8.95 million barrels per day for the week ending April 22.

Overnight, WTI crude closed up 1.5 percent at US$46.03 per barrel, while Brent, the global benchmark, finished 2 percent higher at US$48.14 a barrel. CPC's weekly floating price formula showed that oil prices averaged US$42.54 per barrel as of April 28, up from US$40.70 the previous week.

If the CPC implements a price hike next week as expected, prices at the pump will rise to NT$20-NT$20.1 per liter for super diesel, NT$22.5-NT$22.6 per liter for 92 octane unleaded gasoline, NT$24.0-NT$24.1 per liter for 95 octane unleaded, and NT$26.0-NT$26.1 per liter for 98 octane unleaded, according to the sources.

The oil company is scheduled to announce its price adjustments at noon Sunday. (By Lin Meng-ju and Frances Huang)