Union urges CPC to gather recommendations before revisions to fuel price index are made
By Ted Chen, The China PostTAIPEI, Taiwan -- The Taiwan Petrochemical Workers' Union (TPWU, 台灣石油工會) yesterday urged the Chinese Petroleum Corporation (CPC, 中油) to begin holding public forums to gather suggestions for improving the state-run refinery's floating oil price index, which the domestic price of fuel is based on.
March 1, 2013, 12:03 am TWN
TPWU Chairman Chuang Chueh-an (莊爵安) yesterday commended a recent comment made by CPC board member Chiu Yi (邱毅), who pledged to improve the degree of transparency of its floating oil price index, adding that the suggestions gathered in the public forums would aid in the company's operations.
“This is a good thing, and should be carried out as soon as possible,” said Chuang.
The latest figures of the CPC's floating oil price index indicate that starting on March 4, domestic fuel prices may be reduced by NT$0.3 and NT$0.5 for gasoline and diesel respectively.
The projected per-liter price of fuel for 92, 95, and 98-octane gasoline is expected to be NT$34.2, NT$35.7, and NT$37.7, respectively, with the price of super diesel anticipated to be priced at NT$33 per liter.
In a comment made on Feb. 19, Economics Minister Chang Chia-juch (張家祝) indicated that the current floating oil price index will be revised by industry professionals, and submitted to the special taskforce in charge of improving fuel and electricity prices within two to three months. The new standards will be established and announced to the public in the latter half of the year, according to Chang.
Currently, the planned revisions to the floating oil price index are leaning toward changing the composition ratio of Dubai Crude and Brent Crude prices from the existing 70 to 30, to 65 to 35 percent respectively.
However, the new proposed floating index scheme has been criticized by observers, who claimed that it will result in a lesser degree of price cuts, and a higher degree of price hikes. Industry observers cited the recent price of Brent Crude, which is currently higher than Dubai Crude by an average of US$4 to US$6, representing a discrepancy of NT$0.1 to NT$0.3.
In addition, the proposal to change the basis of the floating index from 92-octane to the higher priced 95-octane gasoline would result in larger increments during price hikes.