Taipei-Formosa Petrochemical Corp., a private fuel supplier, said Saturday it has decided to raise domestic gasoline and diesel prices for next week as worries over a global supply glut receded, sending international crude oil prices higher.
In a statement, Formosa Petrochemical said the shutdown of a British pipeline in the North Sea reduced the fears of many energy traders about global supply and boosted international crude prices this week.
Under such circumstances, Formosa Petrochemical announced a hike of NT$0.2 per liter for both gasoline and diesel next week after a cut of NT$0.1 per liter for gasoline and NT$0.2 per liter for diesel this week.
After the latest adjustments, prices at Formosa Petrochemical gas stations islandwide will rise to NT$23.8 per liter for super diesel, NT$26.3 per liter for 92 octane unleaded, NT$27.7 per liter for 95 unleaded and NT$29.8 per liter for 98 unleaded, the company said.
On Monday, the Forties Pipeline, the United Kingdom's largest, with a capacity of 450,000 barrels a day, was shut down for repairs after cracks were discovered, a move that boosted crude oil prices, market analysts said.
The shutdown could last for several weeks, reducing supply in the global market.
In addition, a report released by the U.S. Energy Information Administration (EIA) on Wednesday showed crude inventories in the U.S. market fell by 5.1 million barrels in the week to Dec. 8 to 442.99 million barrels, the lowest since October 2015.
U.S. production dropped for the fourth consecutive week, easing concerns over a global supply glut among energy traders, analysts said.
However, another report on U.S. oil production, which has soared by 16 percent since mid-2016 to 9.78 million barrels per day, capped the gains posted by crude prices to some extent this week or Formosa Petrochemical's fuel prices could have moved even higher, analysts added.
With the rise in crude oil prices, Formosa Petrochemical's main competitor, state-owned CPC Corp., Taiwan, is expected to announce similar price adjustments for next week at noon Sunday.
CPC calculates its weekly fuel prices based on a weighted oil price formula made up of 70 percent Dubai crude and 30 percent Brent crude.
Based on the slight fluctuations in international crude oil prices, CPC has calculated the average price of crude oil at US$62.13 per barrel for this week, an increase of US$1.0 from a week earlier, according to its website.
Source: Focus Taiwan News Channel