Taipei, Formosa Petrochemical Corp., a private fuel supplier, said Saturday it has decided to lower domestic gasoline and diesel prices for next week after a fall in international crude oil prices this week.
Formosa Petrochemical said the lower crude prices largely reflect an increase in crude inventories in the U.S. market as well as a stronger U.S. dollar against other major currencies.
In the wake of the fall in crude prices, Formosa Petrochemical announced it will cut both gasoline and diesel prices by NT$0.1 (US$0.003) per liter, effective from 1 a.m. Monday, putting an end to a three-week increase in prices.
After the latest adjustments, prices at Formosa Petrochemical gas stations islandwide will fall to NT$25.8 per liter for super diesel, NT$28.1 per liter for 92 octane unleaded, NT$29.5 per liter for 95 unleaded, and NT$31.6 per liter for 98 unleaded, the company said.
An increase in crude inventories in the United States has made many traders wary, sending ripples through the global energy market this week, market analysts said.
According to the U.S. Energy Information Administration (EIA), U.S. crude inventories rose 6.2 million barrels in the week to April 27 to 435.96 million barrels, the highest this year.
Along with higher U.S crude inventories, a rise in U.S. crude production which is set to raise the inventory to 10.62 million barrels per day, the highest since mid-2016 also increased uncertainty on the global market, analysts said.
Moreover, the strength of the greenback, which was boosted by hopes of rate hikes by the U.S. Federal Reserve, placed downward pressure on prices of U.S. dollar denominated items, including crude, analysts added.
However, the downturn in crude prices was to some extent offset by worries of a possible withdrawal by the United States from a nuclear deal with Iran, which could prompt Washington to reimpose sanctions on the Middle East oil producer, analysts said.
Under such circumstances, state-owned CPC Corp. is likely to announce similar price adjustments at noon Sunday to take effect 12 hours later.
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 latest fluctuations in international crude oil prices, CPC's average price for crude oil was calculated at US$71.83 per barrel as of Thursday, down US$0.39 from a week earlier, according to its website.
Source: Focus Taiwan News Channel