Although natural gas prices on the global market have continued to rise, CPC Corp., Taiwan, the country’s sole state-run oil supplier, announced on Monday that it will leave natural gas prices on the local market unchanged for February.

The decision came as the oil supplier followed the government’s policy to stabilize domestic prices at a time when the local consumer price index has kept rising, breaching the 2-percent threshold set by the central bank, which has raised concerns over growing inflationary pressure.

According to CPC, about 98 percent of energy consumed in Taiwan comes from imports so it is no surprise that the movement of local natural gas prices is subject to price fluctuations on the international market due to higher import costs.

To reflect rising import costs, CPC said, domestic natural gas prices should have gone higher, but to alleviate the inflationary pressure in Taiwan, the company has decided to leave its prices intact in February, during which the Lunar New Year holiday started on Saturday (Jan. 29) and will end on Sunday (Feb. 6).

In December, consumer prices in Taiwan rose 2.62 percent from a year earlier, remaining above the 2-percent inflationary alert level for the fifth consecutive month, according to the Directorate General of Budget, Accounting and Statistics (DGBAS).

Due to rising inflationary pressure worldwide, the local central bank is forecast to follow its counterparts in the world and raise its key interest rates in June at the earliest as the U.S. Federal Reserve is expected to kick off its rate hike cycle in March.

Source: Focus Taiwan News Channel