Do­mes­tic fuel prices could fall next week fol­low­ing Iran deal

The China Post - - LOCAL -

Gaso­line and diesel prices in Tai­wan are likely to fall next week af­ter a pre­lim­i­nary nu­clear agree­ment reached by the U.S.led six na­tions and Iran overnight pushed down in­ter­na­tional crude oil prices, mar­ket sources said Fri­day.

Based on a float­ing pric­ing mech­a­nism used by state-owned oil sup­plier CPC Corp. ( ), do­mes­tic fuel prices may fall by NT$0.1 (US$0.003) to NT$0.2 per liter next week, af­ter a rise this week, the sources said.

CPC ad­justs do­mes­tic fuel prices on a weekly ba­sis based on a weighted oil price for­mula con­sist­ing of 70 per­cent Dubai crude and 30 per­cent Brent crude.

The ex­pec­ta­tions of a fall in do­mes­tic fuel prices came af­ter the six pow­ers led by the U.S. and Iran reached an agree­ment un­der which the two sides will start a process to draft a fi­nal deal to limit Iran’s nu­clear weapon pro­gram.

Thurs­day’s agree­ment could pave the way to lift­ing sanc­tions on crude oil ex­ports from Iran, caus­ing in­ter­na­tional crude oil prices to tum­ble. The dead­line for a fi­nal deal is set for June 30.

Brent crude, the global crudeoil bench­mark, fell US$2.15, or 3.8 per­cent, to US$54.95 a bar­rel on ICE Fu­tures Europe overnight, while crude prices on the New York Mer­can­tile Ex­change fell US$0.95, or 1.9 per­cent, to US$49.14 a bar­rel.

The price of a bar­rel of crude oil un­der the CPC’s weekly float­ing price for­mula was US$53.72 on April 2, down from US$54.41 the pre­vi­ous week, ac­cord­ing to CPC’s web­site.

If the price hike is im­ple­mented as ex­pected, prices at the pump will fall to NT$22 or NT$22.1 per liter for su­per diesel, NT$24 or NT$24.1 per liter for 92 oc­tane un­leaded gaso­line, NT$25.5 or NT$25.6 per liter for 95 oc­tane un­leaded gaso­line and NT$27.5 or NT$27.6 per liter for 98 oc­tane un­leaded gaso­line.

CPC is sched­uled to an­nounce the fuel price ad­just­ments at noon Sun­day.

De­spite the op­ti­mism stem­ming from the ten­ta­tive agree­ment be­tween the U. S.- led coali­tion and Iran, CPC cau­tioned that it was still too early to say whether the progress in the nu­clear talks will have a sub­stan­tial im­pact on global oil sup­plies any time soon.

The com­pany doubted the deal would have any im­pact on crude oil sup­plies un­til the end of June, the dead­line for a fi­nal deal to limit Iran’s nu­clear weapons devel­op­ment, or even by Septem­ber.

Un­der sanc­tions im­posed by the West, crude oil ex­ports from Iran have fallen by 1 mil­lion bar­rels a day from the 2.5 mil­lion-3 mil­lion bar­rels ex­ported per day pre­vi­ously, CPC said.

CPC said that even if the fi­nal deal is struck, the West may de­cide to lift the sanc­tions only grad­u­ally, which would ef­fec­tively limit the deal’s ef­fect on global sup­plies.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.