Financial and Technology News

Energy price increases capped at 3 percent: ministry

The Ministry of Economic Affairs yesterday rejected media reports suggesting that it is considering increasing energy prices next month and in October to ease pressure from rising fuel import costs, saying that price rises would be capped at 3 percent for this year.
While a decision on energy prices depends on the electricity price review committee, the ministry said it would recommend that price plans remain unchanged.
While fuel prices reached an interim high in September last year with oil trading at about US$75 per barrel, pressure to raise rates has eased, as prices have declined to about US$65 per barrel, the ministry said.
The committee has 17 seats: nine occupied by government agencies, three drawn from industry groups and five academics.
This year’s review of pricing for utilities is to take place this month.
The committee reached a consensus to limit price increases to no more than 3 percent, the ministry said.
However, the Chinese-language China Times reported that it would take a 6 percent hike to stave off losses at state-run Taiwan Power Co, which faces pressure from rising prices for natural gas — which makes up 55 percent of the nation’s energy generation capacity and is more costly than coal, but is needed to accommodate the government’s pledge to cut coal use to address air pollution.
In light of these challenges, the newspaper said that the ministry would propose an energy price hike of 3 percent next month and another in October to make up the shortfall.
The hikes were planned after deficits mounted after the ministry in September last year halted price rises as a relief measure after flooding and other extreme weather events, it said.
Separately, state-owned oil refiner CPC Corp, Taiwan (CPC) yesterday announced to raise natural gas prices by 2.99 percent this month to reflect rising import costs.
CPC said that compared to last month, this month’s global liquefied natural gas prices have risen by NT$2.1 per kg and that the company has already absorbed an NT$0.9 per kg difference throughout last month to help carry out the government’s policy in stabilizing consumer prices over the Lunar New Year holiday.