Taiwan Prepares $13 Billion Energy Support Package Amid Global Price Surge

Taiwan's government plans to spend around $13 billion this year to help its main power producer, Taipower, and oil refiner CPC absorb rising global energy costs due to the Middle East war.

The country has not passed on most of these costs to consumers, instead heavily subsidizing energy bills to keep inflation down. However, budget estimates made last year are now deemed inadequate as a result of the 'turmoil' affecting energy prices this year.

The economy ministry has proposed a T$180.9 billion supplementary budget for Taipower and CPC to 'absorb price differentials', with an additional capital injection of T$233.8 billion for CPC to improve its financial structure. Without these funds, both companies may struggle to continue serving as price stabilizers, causing price volatility.

State-owned CPC is particularly at risk, with accumulated losses expected to exceed T$127.6 billion, making borrowing difficult and potentially leading to a downgraded international credit rating and reduced procurement negotiating power.