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Gasoline, diesel prices to drop by NT$0.3 per liter: CPC

CPC Corp. (台灣中油公司) yesterday announced that prices of gasoline and diesel will drop by NT$0.3 per liter starting today.

With the changes, CPC will be offering 92-, 95- and 98-grade gasoline at NT$33.7, NT$35.2 and NT$37.2 per liter, respectively. Super diesel will drop to NT$32.6 per liter. Actual prices may vary among gas stations.

This is CPC's second-consecutive weekly cut to gas prices. Gasoline and oil prices have dropped approximately NT$2 per liter in the past two weeks.

International oil prices have been falling due to the slow economic recovery in the U.S., as well as the European debt crisis, according to CPC. Thus, the weighted average of Brent crude and Dubai crude dropped by US$1.61 per barrel last week, prompting CPC had to reduce domestic oil prices by 1.18 percent.

CPC said it will keep its policy of maintaining domestic oil prices lower than prices in Japan, South Korea, Singapore and Hong Kong.

Yuanta-Polaris (元大寶來) fund manager Tseng Shih-yu (曾士育) stated that raw materials and commodity prices, including oil prices, may rise in the future after governments around the world recently initiated new quantitative easing (QE) measures. Furthermore, in addition to its previous 1-trillion-yuan infrastructure project, the Chinese government also decided to infuse 365 billion yuan into the financial market.

Tseng said that based on past experience, it takes one and a half to three months for New York crude oil prices to rise after a QE policy was undertaken.

He forecast that global oil prices may rise after the presidential election in the U.S. on Nov. 6. At that time, the effect of the U.S.' Iran sanctions may fade. Moreover, QE policies might start to influence oil prices, and the demand of oil would also rise because of the winter.

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