Six-Year Freeze Leaves CPC Losing on Every Cylinder
Cylinder LPG is an essential daily necessity. With winter and the year-end festive season approaching, demand is expected to drive nationwide demand higher. However, retail prices have risen only slightly over the years, leaving suppliers under loss pressure. According to CPC official website data, since 2020年12月, the cumulative increase is only 新台幣3.15元 per kilogram, and the Ministry of Economic Affairs recently announced a freeze on cylinder LPG prices through 年底, meaning prices have been almost flat for 6年間.
Taiwan Petroleum Union Chairman Chen Jialin recently said CPC currently absorbs about 23.75元 per kilogram of LPG, while CPC's current listed price is 20.01元 per kilogram, equivalent to losing money on every cylinder sold, highlighting CPC's operating pressure under the freeze policy.
CPC Formosa Petrochemical 1.8元 Gap Sparks Scramble for Supply
Chinese Republic Liquefied Gas Fuel Trade Association National Joint Council Chairman Lai Fangquan said the per-kilogram price gap between CPC and Formosa Petrochemical cylinder LPG is 1.8元. CPC follows the national freeze policy and, with government subsidies covering losses, its price can be decoupled from international markets, but the low price cannot fully meet market demand, so distributors buying LPG from CPC are unable to supply sufficiently.
Lai Fangquan noted that if operators turn to Formosa Petrochemical, higher costs will force them to either lose market share or absorb the cost themselves, a situation especially serious in central Taiwan, leading to operators scrambling to buy CPC gas. Currently Taiwan-wide there are more than 2300 gas retailers and more than 110 bottling plants, with fierce competition. Several bottling plants have merged in recent years to save costs, and more than 10 retailers closed this year. As winter demand rises, the supply gap is emerging, and he believes CPC as a state-owned enterprise should do its utmost to resolve the gap.
Winter Monthly Demand Tops 9萬噸, Pushing Maximum Capacity
CPC Vice President and spokesperson Lin Keru said from 1至9月 this year, CPC's total LPG sales were about 67.8萬噸, with a market share of over 90%. One year ago CPC added propane filling equipment in Shen'ao to boost supply, and current maximum monthly LPG supply capacity can reach 9萬噸, prioritizing stable domestic demand with full supply.
Lin Keru noted that especially in the peak season from 12月 to 明年1月, monthly demand is expected to exceed 9萬噸, and CPC will do its best to supply the market to meet winter household gas use.
Energy Administration to Coordinate and Seek Additional Budget for Price Gap
Energy Administration Deputy Director-General Chen Chongxian said the LPG market operates under a free-market mechanism, but the administration will do its best to coordinate to ensure winter and full-year supply, asking the public to rest assured. The Executive Yuan has already编列 115年 additional budget to subsidize CPC and Formosa Petrochemical for the household LPG freeze and缓涨 costs.
Lai Fangquan said although the government this year has budgeted subsidies for CPC and Formosa Petrochemical losses, given the current efficiency of the Legislative Yuan, whether it can pass promptly remains unknown, urging the legislature to treat this major livelihood issue seriously and not delay the additional budget. He also supports subsidizing Formosa Petrochemical, to have Formosa Petrochemical jointly share freeze responsibility, and hopes the government will coordinate to keep CPC and Formosa Petrochemical cylinder LPG prices aligned and jointly secure Taiwan-wide supply. Chen Chongxian said energy fuel costs are easily affected by international geopolitics, and hopes to prioritize securing additional budget subsidies to avoid increased consumer burden from price volatility. Subsidizing the domestic LPG price gap through additional budget is a more holistic and fair approach for cylinder LPG operators and general household users.