Taipei:Rising natural gas prices due to ongoing tensions in the Middle East are projected to significantly impact Taiwan Power Co. (Taipower), with fuel costs anticipated to increase by NT$160 billion (US$4.92 billion) this year, as announced by the state-owned utility on Thursday.
According to Focus Taiwan, Taipower's Department of Accounting Director-General Tang Hui-lien indicated that if natural gas prices persist at their current levels through the year's end, the company's fuel costs will rise by NT$160 billion compared to pre-conflict levels. This increase follows the escalation of conflict in late February when U.S. and Israeli strikes on Iran heightened tensions, leading to a more than 70 percent rise in natural gas prices for the power sector, adding NT$71.1 billion to Taipower's costs from March to August.
Taipower executives have highlighted the company's financial challenges in briefings with reporters, seeking support for a proposed NT$71.1 billion supplemental budget from the Cabinet to mitigate its mounting losses, which are under legislative review. The utility's accumulated losses are expected to grow by NT$70 billion this year, reaching NT$420 billion, nearing the record NT$421.1 billion loss recorded at the end of 2024.
The company attributes its financial difficulties to elevated fuel expenses and electricity rates set below cost, compounded by an increased interest burden from NT$1.85 trillion in borrowing for infrastructure projects, with interest costs anticipated to hit NT$30 billion this year. Despite these challenges, Taipower has refrained from raising electricity rates since September 2025 to avoid impacting consumer prices. The government has also opted against rate hikes in March and September this year, with the issue scheduled for review in December. Taipower's proposal for a 12.83 percent rate increase in September, citing rising fuel costs, remains under consideration.
