The government has no plan to freeze fuel prices despite worries that a prolonged conflict in Libya could push crude oil prices higher, an economics official said yesterday.
Vice Minister of Economic Affairs Lin Sheng-chung (林聖忠) told a legislative committee meeting that tensions in Libya could trigger a new rise in global oil prices, but the state-run oil refiner, CPC Corp Taiwan (CPC, 台灣中油), would try to cushion the impact using methods other than a price freeze.
“The CPC is currently using a ‘slow rise’ mechanism, under which it absorbs half of the rise in crude prices,” Lin said.
If world oil prices continued to rise, however, CPC would activate a mechanism under which the company, the government and the public would equally share the burden of the price increase, with the government cutting the excise tax on gasoline by half.
CPC president Lin Maw-wen (林茂文) said the mechanism would be activated when the weighted oil price formula used by the company — 70 percent Dubai crude and 30 percent Brent crude — rose above US$120 per barrel.
Oil prices rose in early morning trading yesterday after the attacks on Libya by a Western coalition over the weekend, but fell back later in the day.
Spot contracts were up 1.35 percent from Friday’s close to US$115.84 per barrel for Brent and down 1.05 percent to US$108.77 per barrel for Dubai Fateh at 11:30 GMT.
The spot price for Dubai crude hit a high this year of US$113.60 per barrel on Feb. 24.
Lin said that because of Taiwan’s limited resources and dependence on energy imports, it had few options to keep prices at the pump in check.
“In the end, we have to adopt a multiple absorbing approach. If that fails, we cannot freeze oil prices,” he said.
Minister of Economic Affairs Shih Yen-shiang (施顏祥) said earlier this month that freezing fuel prices would not be a “responsible” way of coping with the problem, because CPC lost NT$139.7 billion (US$4.7 million) in 2008 when fuel prices were frozen for part of the year to cope with record-high crude oil prices.
The company also lost NT$20 billion and NT$4 billion in 2009 and last year respectively as a result of the policy and it was still operating in the red as of March, Shih said.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS