Taipei--Formosa Petrochemical Corp. (????), a privately owned fuel supplier, said Saturday that it will cut its domestic gasoline and diesel prices next week after international crude oil prices plunged more than 6 percent this week.
The weakness of the global oil market came amid rising concerns over a supply glut, prompting Formosa Petrochemical to lower gasoline prices by NT$0.3 (US$0.099) per liter and cut diesel prices by NT$0.4 per liter, effective from 1 a.m. Monday.
It is the third consecutive week in which Formosa Petrochemical has marked down its fuel prices after a cut of NT$0.5 per liter for both gasoline and diesel this week.
After the latest adjustments, prices at Formosa Petrochemical gas stations islandwide will fall to NT$20.6 per liter for super diesel, NT$23.4 per liter for 92 octane unleaded, NT$24.8 per liter for 95 unleaded and NT$26.9 per liter for 98 unleaded.
International crude oil prices have taken a beating, with West Texas Intermediate crude down 6.3 percent in New York, and Brent, the global benchmark, down 5.6 percent in London in the wake of the latest oil inventory data in the U.S. and eased political tensions in Libya, market analysts said.
According to weekly U.S. government data released Wednesday, crude oil stocks in the U.S. market fell only 930,000 barrels, far less than a 2.3 million barrel drop the market had previously anticipated, which made energy traders nervous.
In addition, two of the largest factions in Libya, one of the leading oil producers in the Middle East, have made progress in reaching a consensus to resolve political and economic crises in the country so that the market expects that the favorable development will lead to less disruption in oil supply, analysts said.
There have been doubts that the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil producers will reach an agreement to extend a deal to cut output for another six months so that concerns over an oversupply were running deeper.
The OPEC members and non-OPEC countries are scheduled to meet on May 25 to discuss an extension of the ongoing six-month output reduction agreement, effective from January.
State-owned CPC Corp., Taiwan (??), the main competitor of Formosa Petrochemical, is expected to announce a similar price adjustment on Sunday, with the cut taking effect at midnight.
With the drop in international crude oil prices, CPC has calculated the average price of crude oil at US$49.49 per barrel this week, down from NT$50.33 per barrel a week earlier, according to its website.
Source: Focus Taiwan News Channel