Taipower fuel costs to increase amid tensions

BIG LOSSES: Taipower’s fuel costs would be NT$160 billion higher than before the conflict in the Middle East if natural gas prices hold steady at current levels, it said

Rising natural gas prices amid Middle East tensions are forecast to increase the fuel costs of Taiwan Power Co (Taipower, 台電) by more than NT$160 billion (US$4.92 billion) this year, the state-owned utility said on Thursday.

If natural gas prices remain at current levels through the end of this year, Taipower’s fuel costs would be NT$160 billion higher than before the Middle East conflict, Taipower Department of Accounting director-general Tang Hui-lien (湯惠蓮) said.

Taipower executives briefed reporters at an informal gathering on the company’s financial situation and called for support for the Cabinet’s proposed NT$71.1 billion supplemental budget to help the company cover its growing losses, which is pending legislative review.

The Taiwan Power Co logo is pictured at the company’s building in Taipei in an undated photograph.

Photo: Lin Jing-hua, Taipei Times

Since the war began with US and Israeli strikes on Iran in late February, natural gas prices for the power sector have increased by more than 70 percent, adding NT$71.1 billion to Taipower’s fuel costs from March through August, the company said.

The higher fuel costs are expected to add NT$70 billion to the company’s accumulated losses this year, bringing them to NT$420 billion, close to the record NT$421.1 billion loss recorded at the end of 2024, Tang said.

The company attributed its losses to high fuel costs and below-cost electricity rates, while its NT$1.85 trillion in borrowing for infrastructure projects has increased its interest burden, which is expected to reach NT$30 billion this year.

Taipower has not raised electricity rates since September last year, when the average rate was increased by 0.71 percent, mainly to avoid affecting consumer prices.

The government decided against raising electricity rates in March and last month. The issue is scheduled for review again in December.

At last month’s meeting, Taipower proposed a 12.83 percent rate increase, citing rising fuel costs.