Taiwan Allocates $13 Billion to Curb Energy Prices — OilPrice

Taiwan is allocating the equivalent of $13 billion to compensate state-owned power company Taipower and oil refining company CPC for energy costs. The funds are intended to help curb rising bills for consumers amid a sharp increase in energy prices, OilPrice reports, citing Reuters.

Support for state-owned companies

Taiwan already subsidizes household energy costs to avoid a sharp increase in tariffs. According to the publication, in other countries, additional costs have been partly passed on to consumers and businesses, while authorities have sought to mitigate the impact by reducing excise taxes and taking other measures.

Taiwan’s Ministry of Economic Affairs said that CPC cannot cover the gap between adjusted and unadjusted oil and gas prices. The ministry also noted that without additional budget funding, CPC and Taipower may face difficulties continuing to act as price stabilizers, which could cause price volatility.

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Dependence on imported fuel

Taiwan relies on foreign supplies for 94–97% of its energy consumption. The island imports liquefied natural gas, including under long-term contracts with Qatar and the United Arab Emirates.

Natural gas accounts for more than 23% of electricity generation in Taiwan, oil for another 36%, and coal for nearly 32%. Significant electricity demand is linked to electronics manufacturing: semiconductor producer TSMC consumes about 8% of Taiwan’s electricity, according to OilPrice. Increased imports of liquefied gas from the United States have reduced the risk of shortages, but such supplies are costly.