More oil price cuts

CPC said in the evening it will reduce prices for various types of gasoline and diesel products by NT$0.4 per liter, starting today at 12:00 a.m.

The move came after the state enterprises shaved prices by NT$0.1 per liter just one day earlier,

The successive moves were prompted by a public outcry regarding CPC's over-collection of air pollution prevention fees.

CPC executives acknowledged that the consecutive price reduction was to refund consumers for the costs it has overcharged.

The price reduction and refund will last for 12 months, they confirmed.

The CPC's move to cut oil prices was first taken in response to a press report that both CPC and Formosa Petrochemical Corp., (FPC) in the private sector, collected NT$2.72 billion worth of air pollution prevention fees in 2009.

But the only two fuel product suppliers in Taiwan handed only NT$1.35 billion of the fees over to the Environmental Protection Administration (EPA), leading to an over-collection of at least NT$1.37 billion.

The situation was criticized by the Consumers' Foundation as “extracting” money from oil buyers. Air pollution prevention fees have been incorporated into oil prices paid by consumers, said the foundation.

FPC of the Formosa Plastics Group also reduced its prices by NT$0.1 per liter one day earlier.

But it has not yet made a decision on whether to follow CPC for a further cut. Executives with FPC said they are pondering a similar move but they need time to review the whole market situation.

They said that their company decided earlier to reduce oil prices mainly to stay competitive in the market. “This is not meant to indicate our recognition for refunding the over-collection of air pollution fee to consumers,” Lin Ke-yen, spokesman of the FPC said.

Lin said that air pollution fee should be regarded as part of the oil production costs, not as a kind of tax. Oil refiners can use the income to improve its oil production procedures and air pollution fees will be reduced accordingly, he said.

However, officials at the EPA and members of the Control Yuan are planning to conduct a thorough audit into the two oil companies' accounting books to determine exactly how much they have overcharged consumers over the years.

They will also determine if the two enterprises have violated regulations.

Senior officials at the Ministry of Economic Affairs, which overseas the operations of CPC and other state firms, stressed the policy of treating consumers fairly.

They said CPC should simply refund its customers if it did have made overcharges, adding that all extra charges should be returned to fuel users.

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