Domestic fuel prices may fall sharply next week: sources
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.