The imminent electricity rate hike is an inevitable measure to reflect market cost, President Ma Ying-jeou (馬英九) said yesterday, calling for more understanding of the policy while promising to reduce the impact of potential retail price hikes that might follow.
“The Ministry of Economic Affairs had no choice but to normalize fuel prices and electricity rates because it is impossible to subsidize them with tax revenue forever. … The public should understand that it will be more difficult to make price adjustments if we don’t do it now,” he said during a meeting of the Chinese Nationalist Party’s (KMT) Central Standing Committee.
Ma, who returned from a 12-day trip to Africa yesterday morning, presided over the committee in the afternoon in his capacity as party chairman. He invited Minister of Economic Affairs Shih Yen-shiang (施顏祥) to present a report on the recent fuel price hikes and the proposed electricity rate adjustments.
The ministry has allowed a fuel price increase of about NT$3 per liter to reduce the financial burden on the government from its subsidy to CPC, Taiwan Corp, a policy that has kept prices low over the past five years.
From May 15, household electricity rates are also due to increase by an average of 16.9 percent, commercial electricity rates by 30 percent and industrial rates by 35 percent.
Amid growing complaints about the price hikes and worries that commodity price increases might follow, the president said the government would introduce measures to prevent inflation in the wake of the utility rate increase.
“The government must reflect market costs as the price of energy resources continues to climb around the world … We will also try to reduce the impact via more energy-saving measures, while developing alternative energy,” he said.
In response to the concerns about the management of state-run Taiwan Power Corp and CPC, Ma said the ministry had set up a task force to address the issue and would explain matters to the public by the end of June.
He said that the government would take the opportunity to examine the management of state-run businesses and present a long-term solution to stop constant deficits in state-run businesses.
Shih said the ministry began to review the performance of the state-run oil and electricity companies earlier this month, and discussions about possible privatization of the state-run firms is due to continue until a conclusion is reached in June.