The state-run oil company, CPC Taiwan, has said that fuel prices will not stay high for long. The statement came Monday after gas prices reached a nine-month high with the price for super diesel breaking an 18-month record high.
CPC Vice President Chang Ray-chung said the price hike was due to market concerns that the situation in Iraq could affect global oil supplies. But Chang said that the two Iraqi cities that have been taken over by insurgents are located in the north. He said that since oil fields in Iraq are mostly located in the south, oil prices will not stay high.
“If crude oil production or exports are affected in Iraq, oil supplies and prices will be affected," said Chang. "But analysts believe that the chance of that happening is low.”
Chang also said that global demand for crude oil has gone down in line with the economic slowdown in China and the United States’ development of shale gas. Therefore, he said, oil prices may fluctuate a bit, but will not stay high.
Meanwhile, the economics ministry says that the government will not interfere with the oil market by doling out subsidies or putting a cap on price hikes, unless it is necessary.