CPC shaves price of liquefied natural gas by 2.99 percent

The move came as a surprise since CPC Corp., Taiwan just said one day earlier it had no plan to reduce the LNG price when it deeply slashed the price of liquefied petroleum gas (LPG) to reflect the falling material prices on the international market.

This is the first LNG price cut since May 28.

CPC executives said the LNG prices will be reduced by a range of NT$0.2371 to NT$1.6298 per cubic meter depending on the various types of customers and the cost of delivery, including delivering to households through pipes,

But the average price decrease is about 3 percent.

They explained that the material cost for LNG has been evaluated according to the formula of Japan crude cocktail (JCC) price index which normally has a time lag to reflect the price movements of crude oil.

They noted that when the crude oil price declines sharply, the LNG cost will only move lower at a slower pace.

CPC was actually saddled with a financial burden of a higher import cost than the price the company charged customers during the period of January to November, they said.

The LNG business division of the state enterprise has been faced with an operating deficit of NT$350 million so far this year, they added.

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