CPC may post NT$18 bil. Q1 loss

CPC Corp. may make a loss of NT$18 billion in the first quarter as the Taiwan government prevents the state-run oil refiner from raising fuel prices to help slow inflation, a company official said.

The ceiling on gasoline and diesel prices, imposed in November, may last through March, Liao Tsang-long, a spokesman for CPC, said by telephone from Taipei yesterday. The company recorded a pretax profit of NT$6.93 billion in the first three months of last year, according to the State-owned Enterprise Commission Web site.

"CPC will comply with government policy to help stabilize consumer prices as we're a state-run enterprise," Liao said.

CPC may fail to reach its 2008 net profit forecast of NT$5.2 billion because of government price controls and as costs soar, Liao said. Crude oil traded near a record in New York after reaching US$100 a barrel for the first time Wednesday. Taiwan imports more than 99 percent of its oil needs.

CPC's loss widened to NT$6 billion in December from NT$200 million in the previous month, Liao said. The Cabinet in November imposed a ceiling on gasoline and diesel prices after inflation quickened to a 13-year high. Taiwan will elect a new president in March.

The refiner posted a pretax profit of NT$15.5 billion last year, Liao said. That fell short of a government forecast of NT$18.1 billion.

Oil, which rose 57 percent in 2007, gained 3.8 percent in New York Wednesday on concern violence in Nigeria may disrupt supply as global demand for commodities climbs.