Taiwan's CPC Corp. said yesterday it expects to post a pre-tax loss...
Taiwan's CPC Corp. said yesterday it expects to post a pre-tax loss of NT$82.7 billion in 2008 because of a gap between crude oil procurement prices and domestic product costs.
The government-controlled refiner had an NT$11.83 billion net profit and a NT$14.66 billion pretax profit in 2007.
This year's expected losses come despite newly installed President Ma Ying-jeou's policy of reversing the previous government's December 2007-May 2008 freeze on domestic oil prices, which was an attempt to rein in inflation.
Oil prices have surged in recent months, with the benchmark West Texas Intermediate crude rising 43 percent from October 2007 to May 20, when Ma was inaugurated.
Last week Ma's government said that the magnitude of its new hike in gasoline and diesel prices was only 60 percent of the increase needed to cover the rise in crude costs. The government and CPC will absorb the remainder of losses after the hike, and CPC won't be compensated for prior losses, it said.
Last week's hike in prices of fuel oil and liquified petroleum gas covered only 50 percent of the increase needed to cover the rise in costs, and only 54 percent on the needed increase in natural gas prices.
