TAIPEI - Taiwan said on Thursday that state-owned Taipower will raise electricity prices by as much as 35 per cent following a surge in global crude prices and to curb mounting losses at the utility.
Taipower faces losses of this year of some T$100 billion (S$4.2 billion) , a company source told Reuters in February, and may delay some non-urgent capital spending as it taps financial markets for cash to fund operations.
The economy ministry said in a statement it will allow Taipower to hike prices for industrial use by 35 per cent, residential tariffs by 16.9 per cent, and commercial rates by 30 per cent.
The hike, to be effective May 15, exceeded rates proposed by Taipower this week.
The rise in electricity rates, following a steep hike in fuel prices, will put further pressure on Taiwan's inflation rate. Central bank governor Perng Fai-nan said the island's consumer price index will be below 2 per cent this year, a local newspaper reported, compared with 1.21 per cent in March.
The government lifted petrol prices by an average of 10.7 per cent in early April.
The economics ministry estimated the petrol price rise, the second biggest ever, would raise the consumer price index this year by 0.37 percentage point and cut GDP growth by 0.22 percentage point.