Effective midnight today, fuel prices will be increased by NT$0.7 per liter, CPC Corp. (中油) said yesterday.

Following the price increase, the per-liter prices of 92-octane, 95-octane and 98-octane gasoline will be NT$34.7, NT$36.2 and NT$38.2, with premium diesel at NT$33.6 per liter.

The state refiner attributed the price hike to ongoing unrest and conflict throughout the Middle East, in particular the growing expectations of military action by Western nations against Syria, and the turmoil in Egypt. Amid concerns of the international markets over the possible disruption in the flow of oil, both the Dubai Crude and Brent Crude surged to the new heights since February this year, while the West Texas Intermediate reached new highs not seen since 2011.

CPC stated that international developments warranted a 2.65 percent or NT$0.7 per-liter price hike. According to the company's floating oil price index, calculated as the sum of 70-percent Dubai Crude and 30-percent Brent Crude, the weekly average cost of oil rose from US$108.37 to US$112.16 per barrel. Concurrently, the New Taiwan dollar weakened by NT$0.052 against the greenback, compelling the company to initiate its latest price hike.

Incidentally, the company stated that it has abided by the Executive Yuan's ruling to render monthly subsidies to taxi and charter bus operators since May of 2011. As of Aug. 23, subsidies paid out reached NT$5.065 billion, said the company, noting that the policy will continue.

Meanwhile, the Council of Agricultural stated that in September, all fuel sold for agricultural use will be exempt from a 5-percent operating tax. In addition, subsidies for diesel and gasoline will be set at NT$0.6 and NT$0.5 per liter respectively.

The council stated that September diesel prices are projected to rise by NT$1.1 per liter from the previous month, from the basis of NT$31.4 to NT$32.5 per liter, with half the amount eligible for a NT$0.6 per-liter government subsidy. 92-octane gasoline prices are expected to rise by NT$0.9 per liter, from the basis of NT$32.7 to NT$33.6, and set to be subsidized by NT$0.5 per liter.

The council urged farmers and the public to conserve fuel to mitigate the impact of rising fuel costs.