Cabinet to monitor commodity price fluctuations
By Lauly Li ,The China PostTAIPEI, Taiwan -- Premier Jiang Yi-huah (江宜樺) yesterday said the Cabinet will monitor changes in commodity prices following an electricity-price adjustment slated for October.
August 30, 2013, 12:00 am TWN
Jiang said the Executive Yuan understands that people may think the coming electricity price hike may lead to commodity price fluctuations and in turn businesses increasing commodity prices.
The premier said however that according to Directorate-General of Budget, Accounting and Statistics' (DGBAS) calculations the electricity price hike may affect the gross domestic product (GDP) by less than 0.02 percent, and the consumer price index (CPI) by less than 0.06 percent. This means the electricity price adjustment will not affect commodity prices too greatly, Jiang added.
Jiang said the price hike will not increase prices for households that use less than 500 kilowatt hours of electricity, which means about 86 percent of households in the nation will not be affected by the price adjustment.
As for commercial electricity usage, the premier said commercial units using less than 1,500 kilowatt hours of electricity will pay the same price, meaning 80 percent of commercial units in Taiwan will not be affected.
The Executive Yuan will also take 10 percent off the price difference resulting from the hike for industrial and financial institutions, Jiang said.
The premier said elementary schools and junior high schools will not be affected by the price adjustment, adding that for high schools and universities the government will take 5 percent off the difference resulting from the price hike. Jiang said the government has tried its best to lower the impact of the policy.
In light of this, Jiang said he has asked Vice Premier Mao Chi-kuo (毛治國) to direct the “commodity price stability team” toward inspecting commodity price fluctuations, with an aim to achieving commodity price stability.
Should any firm suggest the electricity price hike will increase their product costs and therefore raise their prices, the government will take action to stop them, Jiang said.
The premier said international fuel prices have continually increased since 2003, and Taiwan Power Co. (Taipower, 台電) is suffering a deficit due to Taiwan's electricity prices failing to reflect increasing operation costs.
The low electricity prices have had a negative influence on Taiwan's energy efficiency and have lowered industrial competitiveness, Jiang said. It has also led the government to subsidize industrial and financial institutions as well as households that use a large amount of electricity, which is not fair, the premier said.
Jiang said he hopes industries from various fields can support the government's electricity price adjustment and maintain the stability of commodity prices.