The move was aimed at helping to break the dominance of the state-run CPC Corp., Taiwan and oil giant Formosa Petrochemical Corp. in the private sector to promote competition in the fuel market.

The amendment was proposed by the Ministry of Economic Affairs (MOEA) and mainly pushed by legislators Ting Shou-chung and Lwo Shih-hsiung of the opposition Kuomintang and lawmaker Chen Min-jen of the ruling Democratic Progressive Party (DPP).

The lawmakers said the new rule will dramatically undercut the costs in setting up companies for importing and marketing oil products.

They estimated that gas station operators will also be able to import petroleum from abroad if they run 10 stations.

Ten separate gas station operators can now also pool funds and set up a joint venture to collectively handle the import business.

Under the current regulations, gas station operators have to rely either on CPC or FPCC for the gasoline or diesel because they are incapable of raising adequate capital and setting up huge facilities to constantly maintain the safety reserve at 50,000 kl.

This is also a key factor that allows the two current suppliers to dominate the oil market here by setting almost identical prices.

The state-run CPC used to be the sole oil product supplier, enjoying their business monopoly for decades. The government later liberalized the policy for the entry of private enterprises into the oil market.

But consumers still complained that the oil giants have managed to collude and set prices all the time.

Lowering the threshold for the organization of new oil import companies is another attempt to break the oligopoly of the business conglomerates.

The lawmakers kept the same safety reserve required for companies engaged in oil refinery operations like CPC and FPCC. Both still have to maintain a stockpile of at least 50,000 kl.

Other new rules in the amendment stipulate that the MOEA could restrict exports of petroleum and other related oil products by private companies in case of an acute shortage of crude oil in the country due to certain emergency situations.

The new rules also push for the accelerated development and promotion of renewable bio-energy and related technology.

They also stipulate that the country’s Petroleum Fund could be used to finance the development and promotion of efficient usage of liquefied gas.

The MOEA is empowered to set the formula and percentage ratios for mixing certain chemicals like biofuels with gasoline or diesel sold at filling stations.

The Bureau of Energy under the MOEA will enforce the relevant new rules to help maintain viable energy policies for Taiwan that relies on imports for almost all of its energy needs.

Subscribe to The China Post and save.  Click hereSharePrintEmail

Write a Comment

Enter your comments - 800 characters max

Receive China Post promos

Respond to this email