The ongoing decline of global crude oil prices is expected to prop up the nation’s GDP growth by between 0.2 and 1 percentage points this year, Minister of Economic Affairs John Deng (鄧振中) said yesterday.
Deng’s comments are based on a forecast by global and domestic experts that global crude oil prices could stabilize at between US$60 and US$80 per barrel in the second half of this year.
“Taiwan’s GDP could grow 1 percentage point in the most optimistic scenario,” Deng said, citing estimatie by foreign institutions.
“I have not heard of any potential negative impact that falling oil prices might pose to Taiwan’s economy,” Deng said.
However, the continual decline in global oil prices is expected to have an adverse impact on state-run oil refiner CPC Corp, Taiwan’s (CPC, 台灣中油) operations in the long term, Deng said.
The minister blamed falling oil prices for CPC’s losses of more than NT$30 billion (US$937.6 million) last year.
Deng said the company will propose a new oil-pricing formula by the end of this month, aiming to reflect its costs in a more precise and expedient way.
Deng also said it is a good time to review the nation’s policies for transportation subsidies to drivers of taxis and trucks, in light of the downward trend in global crude oil prices.
“To improve the nation’s finances, some unreasonable transportation subsidies should be canceled when oil prices decline,” Deng said, but refused to specify which transportation subsidies.
Financial Supervisory Commission Chairman William Tseng (曾銘宗) yesterday said that the declining crude oil prices might lead to mixed results for the nation.
“The decrease in oil prices might have a positive effect on the domestic economy by lowering costs, but it might also have a negative impact for the financial part, such as currency volatility,” Tseng said during a question-and-answer session of the legislature’s Finance Committee yesterday in Taipei.
Additional reporting by Amy Su
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