TAIPEI (TVBS News) — As Russia's invasion of Ukraine enters its second year, Taiwan's energy prices have skyrocketed, contributing to rising inflation rates.
Despite a 5% increase in natural gas imports totaling 20 million tons in 2022, costs have surged by 93%, reaching a total expenditure of NT＄600 billion.
Professor Shiu Cheng-yi of National Chenchi University's Department of International Business remarked, "despite the government's efforts to tackle inflation, including price caps on oil and electricity by CPC and Taipower, both state-owned utility companies continue to face massive deficits."
While Taiwan's Consumer Price Index (CPI) accelerated to 3.04% in January, the state of the economy remains uncertain.
State-owned utility companies have been forced to bear the increasing costs. Last year, Taipower experienced a NT＄267.5 billion loss, while CPC lost NT＄45.5 billion in absorbing international oil and gas price increases.
"Thanks to the government's subsidies, prices of state-owned businesses have remained stable," said Lin Tai-ho, professor at the National Cheng Chung University's Institute of Strategic and International Affairs.
"However, without their assistance, these enterprises would have to adhere to market prices, added Lin.
"The making the current pricing seem like an illusion," he added, explaining that the situation indicates current prices don't reflect the actual market value.
The Governor of Taiwan's Central Bank, Yang Chin-long, warns that the threat of higher inflation rates looms on the horizon.
Combined with the effects of climate change on production lines and the rise of geo-political threats, Taiwan's economic outlook may grow bleaker in the future.