Formosa Petrochemical to cut fuel prices, starting today
Formosa Petrochemical Corp., a private gasoline supplier in Taiwan, said Saturday that it has decided to cut domestic fuel prices by NT$0.3 ( US$0.09)-NT$0.4 per litter for gasoline and by NT$0.5 per litter for diesel, starting at 1 a.m. Sunday.
The move to cut domestic gasoline and diesel prices by Formosa Petrochemical is one day ahead of an expected cut by rival stateowned CPC Corp., Taiwan, which is scheduled to make an announcement at noon on Sunday to make price cuts effective on Monday.
Market analysts said the timing of the price announcement by Formosa Petrochemical ahead of CPC’s showed that the private supplier is eager to compete for a higher share in the domestic oil market.
Starting in February, Formosa Petrochemical, one of the subsidiaries of conglomerate Formosa Plastics Group, adopted a strategy in which the gasoline supplier tends to cut prices earlier than CPC when fuel prices trend lower.
But, when fuel prices move higher, the strategy dictates that Formosa Petrochemical will tend to announce a price hike later than CPC, also aiming to turn customers away from the state oil supplier’s gas stations and to patronize the private supplier’s instead.
Analysts said that the price cut reflected a fall in international crude oil prices this week amid rising expectations that Iran will release more crude oil into the market after a nuclear deal was signed by the Middle Eastern country and the six powers led by the United States last month to rein in Tehran’s nuclear weapons development capabilities.
The agreement is expected to lead the western countries to lift economic sanctions against Iran, analysts said.
In addition, a stronger U.S. dollar has paved the path for lower crude oil prices, while Abdullah al-Badri, secretary-general of the Organization of the Petroleum Exporting Countries (OPEC), reiterat- ed that the OPEC members have no plans to lower production, which boosted fears over an increase in supply, analysts said.
Overnight, West Texas Intermediate crude prices in New York fell 2.9 percent, to US$47.12 per barrel, while Brent crude in London dropped 2.1 percent to US$52.26 a barrel.
After the price cut announcement, prices at the pump for Formosa Petrochemical’s gas stations islandwide will fall to NT$21.70 per liter for super diesel, NT$24.0 per liter for 92 octane unleaded gasoline, NT$25.5 per liter for 95+ octane unleaded gasoline and NT$27.8 per liter for 98 octane unleaded gasoline.