Do­mes­tic fuel prices may fall sharply next week: sources

The China Post - - LOCAL -

Fuel prices in Tai­wan are ex­pected to move sharply lower next week at a time when in­ter­na­tional crude oil prices kept fall­ing amid con­cerns that the weak­ness of the global mar­ket will fur­ther drag down global de­mand, mar­ket sources said.

State-owned CPC Corp. Tai­wan is likely to an­nounce a cut by NT$1 (US$0.03) to NT$1.1 per liter for ga­so­line and diesel for next week af­ter a fall of NT$0.3 per liter for ga­so­line and a de­cline of NT$0.4 per liter for diesel for this week, the sources said.

The CPC cal­cu­lates its fuel prices based on a weighted oil price for­mula, which is com­prised of 70 per­cent Dubai crude and 30 per­cent Brent crude.

Af­ter the price cut by CPC, the lo­cal re­tail price of diesel per liter could fall be­low the NT$20 level, a new low in seven months, the sources said.

A sup­ply glut in the world’s oil mar­ket con­tin­ued to push down crude oil prices af­ter a re­port re­leased by the U.S. Energy In­for­ma­tion Ad­min­is­tra­tion Wed­nes­day showed that the to­tal sup­plies of crude oil and re­fined prod­ucts rose to a record high of 1.28 bil­lion bar­rels since 1990, the sources added.

Since the mem­bers of the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries (OPEC) still keep pump­ing oil into the mar­ket with­out signs of any pro­duc­tion cut, the sit­u­a­tion of an over­sup­ply has even wors­ened, the sources said.

While a ris­ing sup­ply has sent crude oil prices into a tail­spin, wor­ries over a slow­down of the world’s ma­jor eco­nom­ics, in par­tic­u­lar China, the sec­ond largest, fur­ther damp­ened traders’ sen­ti­ment to­ward the oil mar­ket out­look, they said.

Crude prices for Oc­to­ber de­liv­ery in the New York Mer­can­tile Ex­change fell 1.8 per­cent to US$ 38.60 a bar­rel overnight, while Brent, the global bench­mark, also fell 0.2 per­cent to US$43.14 per bar­rel on ICE Fu­tures Europe.

As a re­sult, CPC’s weekly float­ing price for­mula stood at US$42.71 as of Aug. 26, down from US$47.07 seen in the pre­vi­ous week, the state-owned oil com­pany’s web­site showed.

If the price re­duc­tions are im­ple­mented next week as ex­pected, prices at the pump will fall to NT$19.8 per liter for su­per diesel, NT$22.1 per liter for 92 oc­tane un­leaded ga­so­line, NT$23.6 per liter for 95 oc­tane un­leaded ga­so­line and NT$25.6 per liter for 98 oc­tane un­leaded ga­so­line.

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

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