Taipei: Taiwan will not sharply increase its gasoline and natural gas prices despite surging global oil prices triggered by the ongoing Middle East conflict that began with American and Israeli attacks on Iran, officials said Tuesday. Speaking with reporters at the Legislature, Premier Cho Jung-tai stated that the Cabinet has activated a "dual price-smoothing" mechanism since Monday to limit increases in the prices of gasoline and diesel fuel.

According to Focus Taiwan, under the normal fuel calculation formulas, gasoline and diesel would have increased by NT$5.4 (US$0.17) per liter and NT$4.8 per liter, respectively. However, the new mechanism limited the increases to NT$1.5 and NT$1.1 per liter. Vice Premier Cheng Li-chiun mentioned during a Cabinet price stabilization meeting on Monday that state-run CPC Corp., Taiwan, would absorb 60 percent of the price increases.

Taiwan previously adopted a similar policy following Russia's invasion of Ukraine, which caused oil prices to soar, leading to CPC Corp. losses of NT$193.7 billion in 2022, NT$22.4 billion in 2023, and NT$35.45 billion in 2024. Premier Cho also announced the implementation of a 50 percent commodity tax cut on diesel and gasoline imports and subsidies covering 50 percent and 14 percent of fuel costs for the agricultural and fishing sectors, respectively.

During a legislative session on Tuesday, opposition Kuomintang (KMT) lawmaker Wang Hung-wei inquired about the potential disruption to Taiwan's natural gas supplies due to its heavy reliance on imports. Economics Minister Kung Ming-hsin expressed confidence that such a scenario would not happen. He revealed that the ministry has secured 20 of the 22 liquefied natural gas (LNG) carriers needed to transport LNG through April, with plans to secure the remaining two soon.

Minister Kung also noted that CPC Corp. currently has no plans to raise LNG prices, despite reports of Formosa Petrochemical Corp. increasing prices by NT$20 per barrel in parts of southern Taiwan. However, he did not confirm whether this stance would continue amidst the rising natural gas prices due to the Middle East conflict. According to the Japan/Korea Marker (JKM), which tracks natural gas prices to East Asia, including Taiwan, prices on Monday reached US$55.38 per MWh, up 51.3 percent since February 27, just before the conflict began.