The price increase came after crude oil traded near a nine month high in New York after reports that Nigerian unions had started talks with the government to avert a strike that would affect Africa"s largest oil industry.

CPC raised its gasoline and diesel prices by 3.78 percent, or NT$0.6 and NT$0.7 per liter, respectively. The price adjustment took effect at 12 a.m. this morning.

The adjustment brought RON-92, RON-95 and RON-98 gasoline prices to NT$27.9, NT$28.6, and NT$30.1 per liter, respectively, at CPC stations island-wide. The prices are the highest since July 7 last year.

Premium diesel, meanwhile, is now sold for NT$25.3 per liter, the highest ever in Taiwan.

At press time, Formosa Petrochemical Corp., the other major oil refiner in Taiwan, has not announced its price changes. Past experience suggests Formosa will adjust its gasoline and diesel prices by the same margin.

The state-run CPC Corp. has been using a price-floating mechanism where it sets prices according to crude oil traded internationally.

The 3.78 percent increase in gasoline and diesel prices was based on the price difference between oil traded in New York Monday, or US$69.09, and oil traded on West Texas Intermediate last Monday, or NT$65.97.

Crude oil for July, which expires today, jumped US$1.09, or 1.6 percent, to US$69.09 a barrel Monday in New York, the highest close since Sept. 1. The more actively traded August contract was down 12 cents at US$69.50 a barrel.

The Nigerian government told the unions it would suspend a value-added tax increase, limit fuel-price increases and index salaries by 15 percent retroactively from Jan. 1, Agence France-Presse reported, citing unidentified officials close to the talks. The strike may still go ahead, Reuters reported yesterday.

PIN/Chinapost.Com.Tw