Lines formed at gasoline stations nationwide last night after Premier Liu Chao-shiuan (劉兆玄) announced that state-run CPC Corp, Taiwan (中國石油) would raise gasoline prices by NT$6.5 per liter and premium grade diesel fuel prices by NT$7.2 per liter effective from midnight, five days ahead of time.
To help cushion the impact of the first price rise in six months on the public, the government and the CPC would each absorb 20 percent of the planned hikes, while consumers would bear 60 percent, Liu, flanked by economic officials, told a press conference yesterday afternoon.
With the price adjustments, consumers will pay NT$3.9 more per liter for unleaded gasoline and NT$4.4 more per liter for premium grade diesel fuel.
CPC’s retail price per liter for 92-octane unleaded gasoline is now NT$ 33.90, while 95-octane unleaded gasoline is NT$34.60, 98-octane unleaded gasoline is NT$36.10 and premium diesel oil is NT$31.90.
Gas prices were frozen by the former Democratic Progressive Party government last December, while global crude oil prices have risen by approximately 43 percent between last October and May 20.
The price of fuel oil was also raised from NT$14,708 to NT$18,208 per 1,000 liters, while liquefied petroleum gas rose from NT$36 to NT$39.90 per kilogram and natural gas has increased from NT$12.39 per cubic meter to NT$16.24.
Electricity rates will go up when the summer electricity rate takes effect from July to October, and prices will be adjusted again in November, the premier said.
“The size of the hikes merely reflects the increase in procurement costs due to the surge in international crude oil prices,” Liu said.
“The prices were not raised to compensate for the huge losses caused by the price freeze to CPC and Taiwan Power Co (台電)” he said.
The DPP’s price freeze policy had consequences, the Chinese Nationalist Party (KMT) administration said at its first Cabinet meeting last week, before announcing that the government would raise prices of oil and electricity on June 2 and July 1 respectively.
The planned hikes had prompted some consumers and gas stations to stockpile gasoline.
Prosecutors on Monday found 500,000 liters of illegally stockpiled oil in a gas station in Taichung.
Concern about stockpiling — and the resulting risks to public safety — prompted the government’s move yesterday.
“We decided to advance the date of adjusting gasoline prices for security concerns as gasoline kept in unsafe facilities could be very dangerous,” Liu said.
The oil price adjustments yesterday will remain in effect until the end of next month.
“Starting in July, we will adjust oil prices on the first day of each month as usual,” Liu said.
The premier said the government will not impose another price freeze but would “let the market determine the price.”
“However, the 40 percent subsidy [for oil prices] from the government and the CPC will remain unchanged even though the market mechanism is restored,” Liu said.
The government plans to pay for the subsidy through a reduction in the excise tax.
The excise tax on unleaded gasoline will be cut by 19.1 percent, officials said.
The excise tax on diesel fuel will be cut by 35 percent.
Liu said that the government will spend NT$2.83 billion throughout the rest of the year to help economically disadvantaged people with health insurance and education, among others things.