The nation is increasingly dogged by worries about inflation. Due to the increasing cost of energy around the world, almost all prices have gone up, with the notable exception of employees' salaries.
Electricity is the most obvious increase, then gasoline and diesel oil prices. A hike of 15 percent in the price of natural gas is also in the pipeline, while long-haul bus fares look set to climb after a proposal to raise ticket prices by up to 18 percent was approved last week.
The government may take some comfort in the moderate NT$1 increase in a liter of gasoline and diesel oil instituted by China Petroleum Corp (CPC) last Friday -- the company's original plan was double that. But consumer sentiment has turned negative, inflationary expectations are beginning to rise and the higher living costs are expected to feed into this month's inflation figures.
This raises a series of worrying questions. Will the government be able to keep the consumer price index (CPI) under its 2 percent target this year? Will CPC's price increases be sufficient to reflect its soaring import costs? If the NT$1 price increase is not enough, what side effects will it generate? And, how long are the people going to tolerate CPC's price hikes -- no matter how minimal -- that only serve to increase criticism over the company's trustworthiness and intentions?
As a government-owned oil refinery, CPC naturally finds it difficult to fully pass cost increases directly onto consumers. The government is justifiably paranoid about inflation, especially after the CPI rose 1.73 percent last month from a year earlier, the largest year-on-year increase in five months.
The government's attempt to prevent price fluctuations from reflecting the actual level of oil supply and demand, however, only invites the public to speculate on yet another price increase, while discouraging them from conserving energy.
While the latest hikes are expected to help CPC earn an extra NT$12.2 billion (US$376 million) in revenue through the end of this year, the company says that it still faces an estimated loss of NT$50 billion for the year and may have to raise prices again. The company has once again acted like a spoiled child, ignoring calls from both the government and critics to diversify revenues and cut unnecessary expenditure.
The worst scenario that critics have warned about is that the company may follow Formosa Petrochemical Corp and sell more of its oil products overseas, which may eventually create an energy shortage domestic market.
Furthermore, if the government is committed to controlling inflation by insisting that CPC absorb the higher cost of oil imports to keep domestic fuel prices low, the company will be deterred from becoming as efficient as its rivals. CPC, which suffered net losses of NT$19.6 billion in the first half of the year, should realize that its private rival has modern production facilities, low personnel costs and more flexibility in its choice of feedstock, which has enabled it to produce a better product mix and gross margins -- and generate net profit of NT$23 billion over the same period.
To alleviate price pressure, the government said it is prepared to offer subsidiary measures to the public transportation sector, another indication that it is sandwiched between economic needs and societal pressure. The offer's effectiveness is yet to be proven but many have wondered whether these measures are both fair and just.
For example, the offer of an NT$550 discount per month for taxi drivers is short of what people might expect if taxis are to become a part of the public transportation system. The offer was also full of loopholes, which made it seem little more than an empty gesture.
The conflict in the Middle East has been disrupting financial markets, raising concerns about rising inflationary pressures and global economic growth. One market that some investors are particularly worried about has not been heavily covered in the news: the private credit market. Even before the joint US-Israeli attacks on Iran on Feb. 28, global capital markets had faced growing structural pressure — the deteriorating funding conditions in the private credit market. The private credit market is where companies borrow funds directly from nonbank financial institutions such as asset management companies, insurance companies and private lending platforms. Its popularity has risen since
The Donald Trump administration’s approach to China broadly, and to cross-Strait relations in particular, remains a conundrum. The 2025 US National Security Strategy prioritized the defense of Taiwan in a way that surprised some observers of the Trump administration: “Deterring a conflict over Taiwan, ideally by preserving military overmatch, is a priority.” Two months later, Taiwan went entirely unmentioned in the US National Defense Strategy, as did military overmatch vis-a-vis China, giving renewed cause for concern. How to interpret these varying statements remains an open question. In both documents, the Indo-Pacific is listed as a second priority behind homeland defense and
Every analyst watching Iran’s succession crisis is asking who would replace supreme leader Ayatollah Ali Khamenei. Yet, the real question is whether China has learned enough from the Persian Gulf to survive a war over Taiwan. Beijing purchases roughly 90 percent of Iran’s exported crude — some 1.61 million barrels per day last year — and holds a US$400 billion, 25-year cooperation agreement binding it to Tehran’s stability. However, this is not simply the story of a patron protecting an investment. China has spent years engineering a sanctions-evasion architecture that was never really about Iran — it was about Taiwan. The
In an op-ed published in Foreign Affairs on Tuesday, Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) said that Taiwan should not have to choose between aligning with Beijing or Washington, and advocated for cooperation with Beijing under the so-called “1992 consensus” as a form of “strategic ambiguity.” However, Cheng has either misunderstood the geopolitical reality and chosen appeasement, or is trying to fool an international audience with her doublespeak; nonetheless, it risks sending the wrong message to Taiwan’s democratic allies and partners. Cheng stressed that “Taiwan does not have to choose,” as while Beijing and Washington compete, Taiwan is strongest when
RSS