CPC asked to freeze oil price hikes by legislative body

At the moment, domestic sales price of 95-octane unleaded gasoline stands at NT$30.8 per liter and that of diesel oil at NT$27.6 per liter, running close to the ceiling level allowed by the legislature's Economic and Energy Committee.

The provisional motion was jointly raised by Lawmaker Pan Beng-an of the opposition Democratic Progressive Party, and some ruling Kuomintang lawmakers, including Hsu Chung-hsiung, Lin Cang-min, Hsiao Ching-tien, Lee Fu-sing and Chang Chi-jun.

The motion called for the Ministry of Economic Affairs (MOEA) to pay close attention to the impact of international oil prices on the domestic economy and commodity prices, and to take proper countermeasures if the international oil prices have surged to certain levels and keep trending upward, including freezing oil price hikes or having the CPC absorb extra crude oil import costs.

Lawmakers raised the motion when screening the special revenue budgets for foundations supervised by the MOEA at the Economics and Energy Committee of the legislature. During the screening session, DPP Lawmaker Pan Beng-an said that state-run oil company CPC had raised domestic oil prices by 8.83 percent or NT$2.5 per liter within the recent five weeks, with 92-octane, 95-octane and 98-octane unleaded gasoline all soaring past the level of NT$30.

He said that while the international crude oil price hit a high of US$107.42 per barrel last year, the domestic oil price stood at NT$31.9 per liter. "Now, although the international oil price has plunged to US$78 per barrel, domestic gasoline price still lingers at over NT$30 per liter. This is quite unreasonable," Pan said.

Pan continued, the CPC scored total pre-tax earnings of NT$22.3 billion in the first three quarters of the year, already far exceeding the government-set profit goal of NT$8.2 billion for the entire year of 2009 by NT$14.1 billion.

He called for the MOEA to freeze price hikes on domestic oil prices immediately. But KMT Lawmaker Lin Cang-min said immediately freezing oil price increases will run counter to the original spirit of adopting a flexible oil pricing formula.

Accordingly, the Economics and Energy Committee members approved the provisional motion as mentioned above, and resolved to have the MOEA deliver a special report on the oil pricing system within one month.

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