Taiwan petrol price to jump 10 pct as subsidy ends

April 02, 2012 | 08:40

(0) user say

The Taiwanese government announced Sunday the end of a fuel subsidy that had been in place 16 months, pushing up petrol prices by around 10 percent and drawing condemnation from opposition parties.

Motorcyclists fill up at a petrol station in Taipei last month. The Taiwanese government announced Sunday the end of a fuel subsidy that had been in place 16 months, pushing up petrol prices by around 10 percent and drawing condemnation from opposition parties

From Monday, the price of unleaded gasoline will rise at most petrol stations by up to 10.6 percent per litre, while the price of a litre of diesel will jump by 10.3 percent.

"This is a difficult decision. I fully understand that people will have to pay more from their pockets, but we have to do this," Economic Affairs Minister Shih Yen-shiang told reporters.

"As a minister, I have to take into consideration the country's long-term development, which has been threatened by the subsidies."

Unleaded petrol will go up to between Tw$34-Tw$37.5 ($1.15-$1.27) a litre, depending on the type of petrol, while the price of diesel will go up to Tw$33.1.

The move drew swift condemnation from the opposition.

Thomas Lee, a lawmaker from the opposition People First Party, condemned the price hike as "an April Fool's joke the government played on the people".

Main opposition group the Democratic Progressive Party demanded the government overhaul the state-run CPC Corp. Taiwan, the island's main oil supplier, rather than hike prices.

Shih said that since the subsidy was introduced in late 2010, CPC Corp., which controls some 75 percent of the island's petroleum market, had generated a loss of Tw48.6 billion ($1.64 billion).

CPC will end the subsidy Monday, while Taiwan's only other oil supplier, the smaller Formosa Petrochemical Corp., said it would follow suit on Tuesday.

AFP

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional