With international crude oil prices lingering at high levels, the CPC would raise its gasoline and diesel oil prices by NT$3.8 and NT$4.2 per liter, respectively, if based on the floating oil pricing formula, CPC officials said.

Under the existing formula, the size of oil price hikes is set at 80 percent of the increase in the average monthly international crude oil prices, which in turn is based on 70 percent of the Dubai oil futures and 30 percent of Brent oil futures.

In April, both the average monthly Dubai oil futures price and Brent price have broken the level of US$100 per barrel to hit US$105.08, some US$26 higher than the price level recorded at the end of last year.

According to CPC statistics, the company posted aggregate operating losses of NT$22.9 billion in the first quarter of the year.

Also yesterday, Premier-designate Liu Chao-shiuan said that after the new government takes office on May 20, the domestic gasoline and diesel oil prices would be hiked to fully reflect increased crude oil import costs at one sitting.

Liu told reporters that his new Cabinet would review the existing floating oil pricing formula, consider the foreign exchange fluctuation, mull the impact of price hikes on consumers and then determine the optimal size of the oil price hike. Liu said that a new oil price adjustment proposal will be finalized at the first Cabinet meeting, and then put into practice.

An ad hoc panel headed by Vice Premier-designate Paul Chiu is mapping out a feasible oil and electricity price adjustment package. The panel is composed of representatives from the Ministry of Economic Affairs, Ministry of Finance, Ministry of Transportation and Communications, the Ministry of the Interior, the Council for Economic Planning and Development and the Council of Agriculture.

Market insiders said that unless international crude oil prices soften, the domestic gasoline and diesel oil prices should be hiked by at least NT$3.5 per liter if the increased crude oil import costs are to be fully reflected at one sitting for the moment, according to informed sources.

Due mainly to the government starting to freeze hikes on domestic oil prices on Dec. 1, 2007, state-run oil firm CPC Corp. Taiwan suffered operating losses of close to NT$23 billion in the first quarter of this year alone.

In related news, Formosa Petroleum Corp., the private oil refiner, is expected to hike its domestic sales price for gasoline and diesel oil by NT$1 per liter to reflect its increased cost.

But Lawmaker Hsieh Kuo-liang of the Kuomintang, who is also the party’s legislative whip, yesterday called for the FPC not to raise domestic sales prices before consulting with the Ministry of Economic Affairs.

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