[Politics] Executive Yuan Allocates NT$180.9 Billion in Supplementary Budget to Cover Frozen Oil and Electricity Prices
RtiTalk 小編1d agoEdited
Affected by the Middle East conflict and international geopolitical situations, international energy prices have surged. The Ministry of Economic Affairs has proposed a supplementary budget plan, allocating NT$180.935 billion to subsidize CPC Corporation, Taiwan Power Company (Taipower), and related oil companies for absorbing price differences. Premier Cho Jung-tai stated at the Executive Yuan meeting on the 1st that since energy companies have cooperated with the government to stabilize commodity prices for the public, it is necessary for the government to provide budget subsidies and continue to seek support from the Legislative Yuan.
The Middle East conflict has led to global oil and gas supply disruptions, soaring international oil and natural gas prices. On the 1st, the Ministry of Economic Affairs presented a supplementary budget proposal at the Executive Yuan meeting, planning to allocate approximately NT$101.43 billion to CPC, NT$71.104 billion to Taipower, and NT$8.4 billion to related oil companies, totaling NT$180.935 billion.
Hu Wen-chung, Director-General of the Industrial Bureau of the Ministry of Economic Affairs, stated that after the conflict began, CPC urgently procured oil and gas from the spot market but still implemented special stabilization measures when supplying the domestic market, absorbing over NT$100 billion in price differences. Since the conflict began, oil prices have been frozen for 21 weeks and slowly adjusted upwards 6 times, with costs only fully reflected 4 times, impacting CPC's finances.
Hu Wen-chung added that bottled gas prices have been frozen since 2023, and prices for household natural gas have remained unchanged. The electricity price review meetings in April and October this year also decided not to adjust prices temporarily. Therefore, the intention is to use the supplementary budget to subsidize the costs absorbed by CPC and Taipower.
Premier Cho Jung-tai emphasized that after the Middle East conflict, the Executive Yuan immediately instructed the Ministry of Economic Affairs to activate the energy response team, holding multiple special meetings and inter-ministerial collaborations to strive for stable energy supply, commodity prices, supply chain operations, and market order. In response to international energy price fluctuations, absorbing price differences by companies and budget subsidies are methods to stabilize livelihoods. The government finds it necessary to provide subsidies to energy companies, hence the supplementary budget proposal to cover the expenses for prices not fully reflecting costs. Executive Yuan spokesperson Li Hui-chih relayed: "(Original sound) Governments worldwide commonly adopt oil and gas price subsidies to stabilize prices. Asian countries like Japan, South Korea, Indonesia, and Thailand have adopted measures such as fixing retail prices, having companies absorb price differences, and providing budget subsidies to stabilize livelihoods. Therefore, considering CPC, Taipower, and related oil companies' cooperation with the government's policy to stabilize livelihoods, government subsidies are both necessary and justified."
In addition to budget subsidies, the Ministry of Economic Affairs also plans to propose a capital increase of NT$233.834 billion for CPC within this supplementary budget. Hu Wen-chung explained that CPC still needs to undertake approximately 10 natural gas construction projects requiring over NT$480 billion. However, its current capital is only NT$130 billion, and coupled with six consecutive years of losses, its financial burden is heavy. Therefore, a capital increase is needed to strengthen its financial structure and support future construction.
Li Hui-chih mentioned that the Directorate-General of Budget, Accounting and Statistics (DGBAS) reminds that if the supplementary budget proposal for this year is not deliberated and passed by December 31st, it will become invalid, and the increased social welfare allowances and civil servant/teacher/military salary increments from July to December will not be retroactively issued. Therefore, Premier Cho Jung-tai urged the Legislative Yuan to expedite its review, hoping for the third reading to be completed by the end of November, leaving sufficient time for subsequent administrative procedures.
Source Link: https://www.rti.org.tw/news?uid=3&pid=235089
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