Thu, Jul 29, 2004 - Page 11 News List

Great Taipei Gas Corp to hike prices by year's end

MARKET FORCES In response to surging global fuel prices, Great Taipei Corp is planning to hike its rates to cover costs, but it first needs government approval


Amid rising fuel costs, the Great Taipei Gas Corp (大台北瓦斯), a major natural gas supplier in Taipei City, is considering raising retail gas prices by the end of this year, a company official said yesterday.

"We have maintained the current rates since 1993, and with [fuel] costs surging drastically this year, we think it's necessary to adjust the prices to reasonable levels," said Huang Chao-chih (黃朝枝), an associate manager of Great Taipei Gas.

Great Taipei Gas buys natural gas from Chinese Petroleum Corp (CPC, 中油) at NT$9.08 per cubic meter and charges NT$11.98, Huang said, noting that CPC has hiked the wholesale prices for natural gas three times this year -- significantly reducing the company's annual profits.

Great Taipei Gas supplies around 200 million cubic meters of natural gas to 343,000 households in Taipei City, or 64.7 percent, including Chungshan, Ta'an, Hsinyi, Nankang and Mucha districts.

As a result, the company proposed to raise NT$2.995 per cubic meter, or 25 percent of current rate, but a price review commission under the Taipei City Government lowered that range to NT$0.72 per cubic meter, Huang said.

As a partially public company, the price hike needs to be approved by the Taipei City Council, which is in recess. The council will begin a new session in September.

Huang also said the price adjustment may take time for the council to review, and he estimated the new rates may take effect at the end of the year.

Private gas providers such as Shin Shin Natural Gas Co (欣欣天然氣), said it would not match the raise, since the company had constantly adjusted the rates in accordance with costs, said Chang Kuo-tai (張國泰), vice president of the company.

Two other private natural gas suppliers to Taipei City are Hsin Hu Natural Gas Co (欣湖天然氣) and Yang Ming Shan Gas Corp (陽明山瓦斯).

Chang said Shin Shin in April has ratcheted up the price of its natural gas to NT$13.8 per cubic meter to reflect rising costs, and would make similar adjustments if CPC -- its supplier of natural gas -- continues to hike prices.

Shin Shin covers Taipei City's Chingmei and Wenshan districts, and Taipei County's Chungho, Yungho and Hsintien cities, with a total of 260,000 household subscribers, Chang said.

The era of low energy prices appears to have come to an end, as the state-run Taiwan Power Co (Tai-power, 台電) said on Tuesday that the company was considering whether to raise tariffs to reflect rising fuel costs, though it won't do so in the next three months.

Coal prices have rocketed from US$26 per tonne to US$62 per tonne, said Taipower chairman Lin Ching-chi (林清吉). The surging fuel costs have been nibbling away at Taipower's profits starting from the second half of last year, he added.

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