Taiwan would not sharply increase its gasoline and liquefied natural gas (LNG) prices, despite surging global oil prices triggered by the Middle East conflict that began with US and Israeli attacks on Iran, officials said yesterday.
Premier Cho Jung-tai (卓榮泰) said that the Cabinet on Monday activated a “dual price-smoothing” mechanism to limit increases in gasoline and diesel prices.
Under the normal fuel calculation formulas, gasoline and diesel would have gone up NT$5.4 (US$0.17) per liter and NT$4.8 per liter respectively on Monday, but with the mechanism, the increases were NT$1.5 and NT $1.1 per liter.
Photo: CNA
Vice Premier Cheng Li-chiun (鄭麗君) on Monday told a Cabinet price stabilization meeting that state-run CPC Corp, Taiwan would absorb 60 percent of the cost of global increases.
Taiwan adopted a similar policy in the aftermath of Russia’s invasion of Ukraine, which sent oil prices soaring, with CPC Corp reporting losses of NT$193.7 billion in 2022, NT$22.4 billion in 2023 and NT$35.45 billion in 2024.
The Cabinet has also implemented a 50 percent commodity tax cut — the provisional maximum — on diesel and gasoline imports, and would subsidize 50 percent and 14 percent of fuel costs for the agricultural and fishing sectors respectively, Cho said.
At the legislature yesterday, Chinese Nationalist Party (KMT) Legislator Wang Hung-wei (王鴻薇) asked Minister of Economic Affairs Kung Ming-hsin (龔明鑫) whether the war in the Middle East would disrupt Taiwan’s natural gas supplies, which are almost entirely imported.
Kung said he was “confident” that such a scenario would not arise.
The ministry has secured delivery via 20 of the 22 LNG vessels it estimates Taiwan would need to cover imports of the fuel through next month in response to the Middle East situation, Kung said on Monday, adding that it expects to secure the remaining two soon.
CPC has no plans to increase LNG prices, despite reports that Formosa Petrochemical Corp, another major LNG importer, has increased prices by NT$20 per barrel in parts of southern Taiwan, he added.
However, he did not disclose whether that would remain the case if global prices surge due to the conflict.
The Japan/Korea Marker, which covers LNG prices in East Asia, including Taiwan, on Monday showed that the fuel was US$55.38 per megawatt-hour (MWh), up 51.3 percent from US$36.60MWh on Feb. 27, just before the war started.
Meanwhile, Chunghwa Post yesterday said that it has temporarily stopped international mail services to 15 countries due to the war.
The affected destinations are Azerbaijan, Bahrain, Egypt, Greece, Israel, Jordan, Kuwait, Lebanon, the Maldives, Morocco, Oman, Pakistan, Qatar, Saudi Arabia and the United Arab Emirates, a notice posted on Chunghwa Post’s Web site showed.
The suspension took effect yesterday, it said.
Some countries in the Middle East have announced airspace closures or flight restrictions, it said.
The measure was taken to prevent major delays if mail cannot reach destination countries for a long time after being sent, which could affect customer rights, it added.
People who want to send mail to the affected countries can inquire at local post offices about shipment through services that accept FedEx and DHL packages on their behalf, as some of the countries might still be reachable that way, it said.
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