Domestic gasoline and diesel prices are expected to rise next week to a new high in more than one month after Brent crude, the global benchmark, topped the US$50 mark per barrel overnight, market sources said Friday.
International crude oil prices rose for the sixth consecutive session Thursday amid hopes of a production freeze, which could prompt the state-owned CPC Corp. Taiwan (??) to raise domestic fuel prices by NT$1.0 (US$0.032)-NT$1.1 per liter next week, the sources said.
CPC raised gasoline prices by NT$0.4 per liter and hiked diesel prices by NT$0.5 per liter this week in the wake of a rebound in crude oil prices.
The state-run oil company calculates its weekly fuel prices based on a weighted oil price formula that comprises 70 percent Dubai crude and 30 percent Brent crude.
Based on that weekly floating price formula, the price per barrel of crude oil was US$46.53 as of Aug. 18, up from US$42.31 the previous week, following the latest increase in international crude prices, the CPC website shows.
Overnight, Brent crude hit an eight-week high, up 1.79 percent to close at US$50.74 per barrel in London after Chakib Khelil, the former president of the Organization of the Petroleum Exporting Countries (OPEC), said that he expects OPEC members and non-OPEC members will reach a consensus on a production freeze.
The OPEC members and non-OPEC members have scheduled a meeting for September in an effort to strike a deal on a production cap as these oil producers are eager to cope with the current pressure resulting from a supply glut in the world market.
The September meeting had prompted many energy traders to feel upbeat, pushing up international crude prices in the past few sessions, and the former OPEC president's comments in a media interview sent crude prices even higher, the sources said.
Overnight, West Texas Intermediate crude in New York also jumped 3.06 percent to settle at US$48.22 a barrel, a new high since July 5.
In addition to optimism toward a possible production freeze, a weekly report on an unexpected fall of 2.51 million barrels in oil inventories in the U.S. market released by the Energy Information Administration also gave an additional boost to crude oil prices, the sources said.
If CPC implements the price hike next week, prices at the pump will range between NT$20.7 and NT$20.8 per liter for super diesel, NT$23.2 and NT$23.3 per liter for 92 octane unleaded gasoline, NT$24.7 and NT$24.8 per liter for 95 octane unleaded, and NT$26.7 and NT$26.8 per liter for 98 unleaded, according to the sources.
The oil supplier is scheduled to announce its price adjustments at noon Sunday and put them into effect at midnight
Source: Focus Taiwan