The government would maintain a freeze on prices for liquefied petroleum gas (LPG) and liquefied natural gas (LNG) amid rising costs for many items, Minister of Economic Affairs Wang Mei-hua (王美花) told a meeting of the legislature’s Economics Committee yesterday.
Wang’s remark came as lawmakers were keen to extract promises from her that the price of LPG, commonly sold in 20kg cylinders for cooking, would not rise, despite a steep increase in production costs.
“Is it true that the government subsidy for LPG is already more than what consumers pay?” Democratic Progressive Party Legislator Cheng Yun-peng (鄭運鵬) asked.
Photo: George Tsorng, Taipei Times
“Yes, we are basically selling LPG to consumers at a 55 percent discount,” Wang said. “That is, the government is paying more for LPG than the consumers who buy it.”
Despite the steep subsidy, Wang committed to maintaining a freeze on the price of LPG for now.
Chinese Nationalist Party (KMT) Legislator Yang Chiung-ying (楊瓊櫻) was similarly concerned about LNG prices, which have been spiking on the spot market.
“Is it not true that the LNG market is going into its peak season and prices might go up further?” she asked CPC Corp, Taiwan (CPC, 台灣中油) acting chairman and president Lee Shun-chin (李順欽). “Please tell me what CPC intends to do.”
Lee said that thanks to the multi-year contracts CPC has signed, the company is not as exposed to wild price swings as the LNG market.
However, the government’s price stabilization policy would come at a cost for CPC, Lee said.
“We will continue to support the government’s policy, although it means that in November and December CPC will lose NT$50 billion (US$1.8 billion),” he said.
While CPC’s petrochemical and refining business was profitable, the losses it has shouldered in its LPG and LNG businesses mean that it projects a NT$40 billion loss for the company this year, he said.
“The money we made for the whole year has been eaten up by fuel subsidies for LNG, LPG, diesel and gasoline products,” Lee said.
Also yesterday, the Bureau of Energy released its third-quarter energy use report, which showed that energy use rose 5.9 percent year-on-year, with industrial consumption making the biggest jump at 13.4 percent due to demand for steel, petrochemicals, plastics and semiconductors.
Industrial use accounted for 61.4 percent of the nations’ energy use in the third quarter, the report said.
Residential use went down 1.9 percent year-on-year and only accounted for 8.7 percent of total use, the report said.
However, gas use went up as people stayed at home and cooked more, it said.
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