The new Chinese Nationalist Party (KMT) government will remove the freeze on fuel and electricity rates imposed by Democratic Progressive Party (DPP) government last December, with fuel prices set to rise next month and electricity rates going up in July.
Officials made the announcement at a press conference after the new Cabinet’s first weekly meeting.
“The extent of the hike in oil price will be declared on June 1, while the electricity rate hike will be put into effect in July,” Minister of Economic Affairs Yiin Chii-ming (尹啟銘) said.
PHOTO: FANG PIN-CHAO, TAIPEI TIMES
The DPP government froze utility prices last December, amid the rise in international oil and commodity prices.
“The previous policy of freezing the prices has had consequences, which has made it necessary to adjust the prices,” Premier Liu Chao-shiuan (劉兆玄) said.
Those consequences were: a failure of utility prices to reflect their actual costs — violating the “user pays” rule, huge losses for CPC Corp, Taiwan (台灣中油) and Taiwan Power Co (台電), the fueling of inflationary fears, energy inefficiency and lack of incentive to reduce carbon emissions, he said.
The Cabinet did decide on the percentage by which the oil and electricity prices would be hiked, but refused to announce them. Officials said the Cabinet was following a convention of declaring the actual rate hikes on the first day of the month the hikes take effect.
“After adjusting the prices, Taiwan’s oil prices will still be the lowest of Asia’s four little dragons, and the electricity rate will be slightly higher than South Korea’s, which has frozen its electricity price,” Liu said.
Without the price freeze, Liu said oil prices would be NT$5.2 more, while the price of diesel would have gone up by NT$5.8 this month.
“It that had happened, we would not have to raise the prices significantly now,” Liu said.
The price-hike proposal will go along with an extra budget of NT$ 114.4 billion (US$3.747 billion) for the rest of the year, which officials said would offset the negative impact of rising energy prices on economic growth.
“The price hike is expected to cause 0.5 percent drop in economic growth, but the extra budget, the opening of up of the country to Chinese tourism and the implementation of cross-strait weekend charter flights will have a positive contribution to economic growth,” Council of Economic Planning and Development Chairman Chen Tian-jy (陳添枝) said.
Chen said an increase of 0.42 percent in annual economic growth is expected with the whole package, which will bring this year’s economic growth rate to close to 4.8 percent.
Of the extra budget, NT$12.5 billion will be used to compensate public transport and taxi drivers for increased fuel costs and NT$78.3 billion was earmarked to help local government complete public infrastructure projects.
Chen said the government would not raise public transport or taxi fees for six months.
Meanwhile, President Ma Ying-jeou (馬英九) promised yesterday to map out supplementary measures to minimize the impact of oil price hikes.
“What needs to be done needs to be done,” he said. “The process may be painful, but the longer we wait, the more painful it will be.”
Ma said the price hikes were bound to invite criticism, but a responsible government must do the right thing even if it comes under criticism.
The situation might develop in an averse direction if public expectation for a price hike continues, he said, adding that he was not sure whether the CPC, Taiwan and Taipower will be able to bear the losses until the end of this year if the prices did not go up.
ADDITIONAL REPORTING BY KO SHU-LING
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique