Jan. 6 (Bloomberg) -- CPC Corp., Taiwan's state-owned oil refiner, said its Kaohsiung refinery's vacuum gas oil unit had an explosion and fire that injured two workers last night. Its oil supply won't be affected.

The fire at the refinery in the island's southern city of Kaohsiung was extinguished swiftly, the company said today in an e-mailed statement, without elaborating.

The explosion, caused by a leaking pipe, may cut about 5 percent of CPC's oil supply, and its two other refineries will increase production to fill the gap.

If need be, CPC doesn't rule out the possibility of buying oil from Singapore's spot market, the Taipei-based Economic Daily News reported today, citing an unidentified CPC executive.

CPC may have a loss of NT$18 billion ($554 million) in the first quarter as Taiwan's government prevents the state-run oil refiner from raising fuel prices to help slow inflation, a company official said Jan. 3.

To contact the reporters on this story: James Peng in Taipei at jpeng7@bloomberg.net;

Last Updated: January 5, 2008 22:00 EST