Sat, Mar 27, 2004 - Page 10 News List

Public expected soon to feel increasing energy costs

FUELLING INFLATION Transport companies are expected to be the first to raise prices in response to the prolonged increase in the costs of crude oil and coal


Rising energy costs may soon force industries to raise prices, industrialists said yesterday.

Consumers may first pay more on transportation fares, as oil prices have been surging since late last year.

"We are considering raising ticket fares as fuel costs keep increasing," Lu Chieh-shen (鹿潔身), deputy director of the Taiwan Railway Administration's (TRA, 台鐵) Transportation Department, said yesterday. "The price level has not been adjusted since 1995."

The TRA has been reporting losses from declining traffic over the past few years because of the economic downturn and competition from other means of transportation, including long-haul buses and the Taipei Mass Rapid Transit system, said Liu Chih-cheng (劉志正), director of the Planning Department at the TRA.

Although the TRA can propose price adjustments every two years, the last set of proposals were turned down by the legislature for political considerations, Liu said. As a result, fares for train tickets, especially short-distance ones, are lower than for alternative modes of transport.

For example, the train fare from Panchiao in Taipei County to Sungshan in Taipei City is NT$18, while the bus fare for the same distance is NT$30 or more.

Long-distance bus operator Kuo-kuang Motor Transport Co (國光客運) said it was considering fare hikes to its administrator, the Taiwan Area National Freeway Bureau (國道高速公路局), as the company has been suffering losses of NT$7 million to NT$8 million per month because of the rocketing oil prices, said Feng Pao-lo (馮保羅), manager of Kuo-kuang Motor.

Smaller private long-haul bus operator Aloha Bus Co (阿羅哈客運), however, said it had no plans to change fares but that rises were possible if oil prices continued to increase, said Lin Ting-chien (林廷謙), vice president of the company.

Taxi drivers also bear the brunt of the fuel costs and suggested a fare rise early this year. The proposal was withdrawn as taxi drivers feared that customers would turn to mass transportation, said Chen Teng (陳燈), chairman of the Taipei City Taxi Transportation Federation (台北市計程車公會).

Electricity may be the next to rise, as the price of coal has risen from US$27 per tonne last year to US$52 per tonne this year.

"We may propose asking the government to raise electricity rates starting next year," Lee Chuan-lai (李傳來), a public relations official at the state-run Taiwan Power Co (Taipower, 台電), said yesterday.

Last year, Taipower bought 89 percent of the coal it needs for this year, and therefore there was no urgency for the company to raise electricity rates at the moment, Lee said. However, the increased price of coal, along with freight costs that have more than doubled, would cost Taipower NT$20 billion this year, while Taipower is required to give NT$15.5 billion to the government this year, Lee said.

Furthermore, consumers will be billed more for water, as Taiwan Water Supply Corp (自來水公司) and the Taipei Water Department (台北自來水事業處) are likely to propose price adjustments to the Water Resources Agency, probably from NT$9.5 per cubic meter to NT$13.5 per cubic meter, according to Chen Shen-hsien (陳伸賢), deputy director of the agency. The hike will go into effect in September at the earliest, Chen said.

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