Formosa Petro­chem­i­cal to cut fuel prices, start­ing to­day

The China Post - - LOCAL -

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.

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