Taipei [Taiwan], March 11 : Taiwan will not sharply increase its gasoline and natural gas prices despite surging global oil prices triggered by the ongoing Middle East conflict that began with American and Israeli attacks on Iran, Focus Taiwan reported, citing officials.
As per the news report, Premier Cho Jung-tai said the Cabinet has activated a "dual price-smoothing" mechanism since Monday to limit increases in the prices of gasoline and diesel fuel.
Under the normal fuel calculation formulas, gasoline and diesel would have gone up NT$5.4 (USD 0.17) per liter and NT$4.8 per liter, respectively, on Monday, but under the mechanism, the increases were limited to NT$1.5 and NT$1.1 per liter.
Vice Premier Cheng Li-chiun said Monday during a Cabinet price stabilization meeting that state-run CPC Corp., Taiwan, would absorb 60 percent of the price increases.
Taiwan adopted a similar policy in the aftermath of Russia's invasion of Ukraine, which sent oil prices soaring, but led to CPC Corp. losses of NT$193.7 billion in 2022, NT$22.4 billion in 2023 and NT$35.45 billion in 2024.
As per the report, Cho said the Cabinet has also implemented a 50 percent commodity tax cut -- the provisional maximum -- on diesel and gasoline imports and will subsidize 50 percent and 14 percent of fuel costs for the agricultural and fishing sectors, respectively.
During a legislative session Tuesday, opposition Kuomintang (KMT) lawmaker Wang Hung-wei asked Economics Minister Kung Ming-hsin whether the war in the Middle East will disrupt Taiwan's natural gas supplies, which rely almost entirely on imports.
Kung replied that he was "confident" such a scenario would not occur.
Kung said Monday that the ministry has secured 20 of the 22 liquefied natural gas (LNG) carriers it estimates Taiwan will need to transport LNG through April in response to the Middle East situation, adding that it expects to secure the remaining two soon.
The minister also said that CPC Corp. currently has no plans to raise LNG prices, despite reports that Formosa Petrochemical Corp., another major LNG importer in Taiwan, has increased prices by NT$20 per barrel in parts of southern Taiwan.
But he did not disclose whether that would continue, as natural gas prices surge due to the Middle East conflict.
According to the Japan/Korea Marker (JKM), which covers natural gas prices to East Asia, including Taiwan, prices on Monday reached US$55.38 per MWh (megawatt-hour), up 51.3 percent from the US$36.60 per MWH seen on Feb. 27 just before the war started.