Taiwan Power Co (Taipower, 台電) is to keep electricity rates unchanged for six months from next month in an effort to curb inflation risks due to the Middle East conflict, which has bumped global crude oil prices to more than US$100 per barrel, the Ministry of Economic Affairs said yesterday.
The average electricity rate would stay unchanged at NT$3.78 per kilowatt-hour for the next six months, Deputy Minister of Economic Affairs Lai Chien-hsin (賴建信) told a news conference after the electricity price review committee wrapped up its meeting.
Based on its pricing formula and an increase in the cost of generating power, Taipower had proposed raising electricity rates by an average of 1.79 percent to NT$3.85 per kilowatt-hour on average, Lai said.
Photo: CNA
However, the committee froze price hikes, Lai said, adding that the decision was based on the potential effects of rising global fuel prices amid the US-Israeli war with Iran, as well as US tariffs.
The committee also aimed to help safeguard the competitiveness of local industries by keeping electricity cost unchanged, he said.
Taipower still has some leeway to absorb increases in power generation costs, as the state-run utility company reported profit of NT$72.9 billion (US$2.29 billion) last year, Lai said.
If the war ends within three months, the Ministry of Economic Affairs expects there to be little chance that global prices in October would be much higher, he said.
The committee is to hold another meeting in September to review the electricity rates.
If the war lasts longer than three months, the committee at its next meeting would consider the price trends of global crude oil and liquefied natural gas (LNG) when establishing domestic electricity price hikes, he said.
Ahead of yesterday’s meeting, General Chamber of Commerce of the Republic of China chairman Paul Hsu (許舒博) said in a statement that amid the tensions in the Middle East, the government should prioritize ensuring stable supplies of oil and LNG, while avoiding electricity rate hikes.
“Inflation is highly correlated to electricity prices, and inflation is difficult to reverse once it goes up,” Hsu said.
The government should prioritize price stability and absorb costs within manageable limits, he said.
Separately, the Cabinet said it has adopted a series of measures in response to the effects of the Middle East tensions on global energy markets and prices, including keeping household LNG and liquefied petroleum gas (LPG) prices unchanged next month during a price stabilization meeting on Thursday.
The Cabinet also froze price hikes for fertilizers, the Cabinet said.
Household LNG and LPG prices are closely tied to dining and restaurant costs, the Cabinet said.
In addition, the government would closely monitor the supply and prices of key daily necessities such as plastic bags and establish a platform to stabilize the supply of medical consumables to ensure no shortages or disruptions, it said.
Additional reporting by CNA
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