Taiwan’s liquefied natural gas (LNG) supply is about 71 percent covered by mid to long-term contracts, mainly with Australia and Qatar, as well as 12 other countries, the Ministry of Economic Affairs said in a report to the legislature yesterday.
Although Taiwan’s trade with Ukraine and Russia is not significant, Russia is the third-largest supplier of LNG to Taiwan, accounting for 9.7 percent of supply, the ministry said.
The nation’s LNG contract with Russia is set to expire this month, the ministry said, adding that it has already identified alternative supply sources such as the US.
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Taiwan currently has an LNG safety stock of 10.2 days’ supply, the ministry said.
The ministry said it would closely monitor market dynamics and hold discussions with industry players to ensure that domestic production is not affected by unstable commodity prices in the global supply chain, as the war in Ukraine seems likely to continue.
At a meeting of the legislature’s Economics Committee, Lee Shun-chin (李順欽), president and acting chairman of state-run fuel supplier CPC Corp, Taiwan (CPC, 台灣中油), said that if crude oil prices climb to US$150 per barrel, as predicted, the company would face losses of about NT$500 billion (US$17.53 billion).
Oil prices are likely to reach US$150 to US$200 per barrel later this year, as Russia’s invasion of Ukraine continues to affect international commodity markets, several foreign institutions have forecast.
CPC refines about 140 million barrels of oil per year, with 80 percent of the costs managed through the government’s price stabilization mechanism, while the firm absorbs the remaining 20 percent, Lee said.
For every US$1 increase per barrel in international oil prices, CPC would have to spend US$140 million on refining, he said.
Separately, the ministry said that the price of liquefied petroleum gas (LPG) sold in cylinders for domestic use would increase before the end of next month.
While prices of commodities in Taiwan have risen recently, the government would not permit any increase in the price of domestic bottled gas, at least for the next six weeks, in an effort to ease the financial burden on households, the ministry said.
The average retail price of a 20kg cylinder of LPG was NT$654 as of last month, the Bureau of Energy said.
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