Stores should not raise the prices of their products, Minister of Economic Affairs Wang Mei-hua (王美花) said in anticipation of a rise in commodity prices triggered by the electricity rate increase next month.
This was surely a good statement; it would be great if all industries and businesses could listen to the minister’s words and meet her expectation by creating a peaceful and happy country.
However, this is likely to fall short of her expectations.
Before next month even arrives, the famous Japanese ramen restaurant chain Ichiran already announced that it would raise the price of its noodles.
Theoretically, if energy cost accounts for 10 percent of the total production cost of a product, then a 10 percent electricity price hike would only increase the total production cost by 1 percent.
However, this is a purely mathematical analysis and is not the case in practice.
Experience tells us that an increase in fuel and electricity prices would lead to a price hike in everything, because fuel and electricity prices serve as price indicators. There are three potential scenarios below:
First, the prices of energy-related products would certainly go up.
However, the rate of increase is not only based on the electricity price hike, but also on the cumulative effect of changes in the production chain as a whole.
Upstream and midstream businesses accumulate or even add the costs of raw materials, energy and labor, and then pass them on to the downstream businesses.
Simply put, a bakery would not only consider the electricity costs of baking, but also the raw materials needed, such as flour, eggs and even packaging materials, the prices of which all go up.
As a result, consumers are left to suffer in silence, as all prices increase.
Second, businesses not directly affected by electricity costs, such as the parking lots of Taiwan High Speed Rail stations, would also have to raise prices, due to the increase in its operators’ expenditures.
The consideration of operators in raising their prices is not an increase in direct production costs, but the need to satisfy their livelihood and maintain their operational needs.
Even the prices of fruit and vegetables might have to go up, because farmers have to make a living too. When their home electricity bills go up, they would of course raise the prices of the produce they sell.
Third, as for socio-psychological factors, the public perception would be that if the government takes the lead in raising prices, industry would follow suit.
When public transportation fares go up, it is more likely that this would have a significant impact on overall price hikes in the economy.
If a price hike is reasonable, the public has no choice but to accept it.
Still, hopefuly the government keeps a strict eye on the situation and those taking advantage of the opportunity to inflate their prices, so as to minimize the pain felt by the public due to rising electricity rates.
Chen Wen-ching works in environmental services.
Translated by Eddy Chang
After nine days of holidays for the Lunar New Year, government agencies and companies are to reopen for operations today, including the Legislative Yuan. Many civic groups are expected to submit their recall petitions this week, aimed at removing many Chinese Nationalist Party (KMT) lawmakers from their seats. Since December last year, the KMT and Taiwan People’s Party (TPP) passed three controversial bills to paralyze the Constitutional Court, alter budgetary allocations and make recalling elected officials more difficult by raising the threshold. The amendments aroused public concern and discontent, sparking calls to recall KMT legislators. After KMT and TPP legislators again
In competitive sports, the narrative surrounding transgender athletes is often clouded by misconceptions and prejudices. Critics sometimes accuse transgender athletes of “gaming the system” to gain an unfair advantage, perpetuating the stereotype that their participation undermines the integrity of competition. However, this perspective not only ignores the rigorous efforts transgender athletes invest to meet eligibility standards, but also devalues their personal and athletic achievements. Understanding the gap between these stereotypes and the reality of individual efforts requires a deeper examination of societal bias and the challenges transgender athletes face. One of the most pervasive arguments against the inclusion of transgender athletes
When viewing Taiwan’s political chaos, I often think of several lines from Incantation, a poem by the winner of the 1980 Nobel Prize in Literature, Czeslaw Milosz: “Beautiful and very young are Philo-Sophia, and poetry, her ally in the service of the good... Their friendship will be glorious, their time has no limit, their enemies have delivered themselves to destruction.” Milosz wrote Incantation when he was a professor of Slavic Studies at the University of California, Berkeley. He firmly believed that Poland would rise again under a restored democracy and liberal order. As one of several self-exiled or expelled poets from
EDITORIAL CARTOON
RSS