President Ma Ying-jeou (馬英九) yesterday said that the recent major decline in global crude oil prices was impossible to predict, brushing aside criticism of the government’s decision to allow fuel prices to rise.
International crude oil prices have dropped steadily for the past 10 weeks, sparking criticism of the Ma administration’s decision to allow refiners to raise gasoline and diesel prices by an average of 10.7 percent on April 2, the steepest increase in four years.
“International crude oil prices dropped for 10 consecutive weeks, and even experts were surprised by the magnitude of the decline. That tells us that things are unpredictable,” Ma said while attending a graduation ceremony at National Chiayi University.
While Ma declined to discuss the fuel-price policy, the Chinese Nationalist Party’s (KMT) legislative caucus had apologized earlier in the week for the Ma administration’s “misguided” policy of fuel price increases.
Ma yesterday defended the government’s efforts in leading Taiwan through the global financial crisis and stressed the importance of economic development and the nation opening itself to the world.
“Taiwan needs to work harder on economic liberalization. We must open ourselves to the world, or the world won’t embrace us,” he said.
Premier Sean Chen (陳冲) yesterday also defended the fuel-price increase policy, which is widely regarded by analysts and members of the public as a main cause of recent price increases.
“Anyone would have made a similar decision if they had read reports predicting [crude] oil prices published by the world’s major forecasting institutions in February or March, including investment banks and think tanks. They all predicted an upward trend for oil prices this year,” Chen said.
The Democratic Progressive Party has lashed out at state-run oil refiner CPC Corp, Taiwan (CPC, 台灣中油) over its proposal to raise the prices of gasoline and diesel products. Since the proposed policy was approved by the government and took effect on April 2, CPC has scaled down the prices every week in line with the continuous fall in crude oil prices, with the latest downward price adjustment expected next week.
In the intervening period since April 2, CPC has cut fuel prices by up to about NT$2 per liter, and it only earned an extra NT$1.4 per liter from the price hikes, Chen said.
In response to a press query on whether the government was responsible for triggering an escalation of retail prices, Chen said it was the market that decided prices, rather than any single person.
“Despite that, the government has the obligation to create an environment where market mechanisms can operate normally,” Chen said.
Chen added that the Cabinet-level price stabilization task force led by Vice Premier Jiang Yi-huah (江宜樺) has been working on the issue and the government would use all means necessary to ensure that retail prices are in line with market conditions.