Tue, Dec 21, 2004 - Page 10 News List

Consumers' group calls on refiners to drop prices

ENERGY PRICES The group said retail rates should decline in line with international oil prices, but officials said prices here are already lower than in most countries

By Jackie Lin  /  STAFF REPORTER

As international crude oil prices have declined to around US$40 per barrel in recent days, the Consumers' Foundation (消基會) yesterday condemned the government's inability to contain price fluctuations and called on oil refiners to reduce retail prices.

Talk of price increases began to emerge three days after the legislative elections, when several local media reports said that price hikes for water and electricity rates would definitely take place early next year. During the campaign, politicians avoided the issue.

"State-run businesses should function as the key to restraining price increases, but apparently they have neglected consumer sentiment and instead are placing tremendous burdens on low-income families and jobless people by means of adjusting commodity prices," Jason Lee (李鳳翱), chairman of the non-profit foundation, said in a telephone interview.

Taiwan Water Supply Corp (台灣自來水), which supplies water to nearly 80 percent of the nation's population, has submitted a rate increase proposal to the Ministry of Economic Affairs, whose reviewing committee is slated to discuss the case at the end of this month.

State-run Taiwan Power Co (Taipower, 台電) is also working on a proposal to raise electricity fees sometime next year, said Huang Hui-yu (黃惠予), head of Taipower's public affairs department.

Huang said international coal prices have risen over US$50 per tonne recently, from US$26 in the latter half of last year. Transportation fees have also more than doubled during the same period.

"If we don't adjust electricity fees, the company will incur big losses next year," Huang said.

Taipower posted pre-tax profit of NT$9.3 billion for the first 11 months this year, representing only 60 percent of its annual statutory target of NT$15.5 billion.

Although the government has not reviewed the price-increase proposals, local Chinese-language media have speculated that water fees will be raised by 30 percent and electricity rates will increase by more than 10 percent. Huang refused to comment on the matter.

As for oil -- the important indicator swaying price fluctuations -- Lee urged the nation's two major suppliers, Chinese Petroleum Corp (CPC, 中油) and Formosa Petrochemical Corp (台塑石化), to reduce domestic pump prices on gasoline after international oil costs have fallen.

CPC reported pre-tax profit of NT$23.3 billion between January and November, nearly 190 percent of its annual forecast of NT$12.4 billion.

Formosa Petrochemical also projects posting earnings per share of NT$5 this year, Lee said.

"Shouldn't they follow the international trend to adjust oil prices downward and benefit consumers?" Lee said.

In response, Liao Tsang-long (廖滄龍), CPC's spokesman, said compared with neighboring Asian countries, Taiwan's retail gasoline prices are cheaper by more than NT$3 per liter cheaper.

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