TAIPEI — Taiwan is finally raising gasoline and diesel prices after holding them steady for six consecutive weeks, as the escalating Middle East conflict pushes international oil costs sharply higher.
State-run CPC Corp., Taiwan announced that gasoline prices will increase by NT$0.70 per liter and premium diesel by NT$0.60 per liter beginning Monday, September 14, through September 20.
That will bring CPC’s recommended retail prices to:
- 92-octane gasoline: NT$31.20 per liter
- 95-octane gasoline: NT$32.70 per liter
- 98-octane gasoline: NT$34.70 per liter
- Premium diesel: NT$29.90 per liter
The increase marks the first upward adjustment after six straight weeks of frozen prices.
Why Taiwan is raising prices now
The immediate trigger is the sharp increase in international crude oil prices following renewed fighting and rising supply and transportation risks connected to the Middle East conflict.
CPC said its 7D3B oil-price indicator averaged US$115.61 per barrel during the week of September 7–11, compared with US$99.82 the previous week.
That represents an increase of US$15.79 per barrel in just one week.
Under Taiwan’s normal floating-price mechanism, that surge would have translated into a much larger increase at the pump — roughly 12.29%, according to CPC.
Instead, consumers will see increases of only NT$0.70 for gasoline and NT$0.60 for diesel.
The reason is a massive government and CPC effort to absorb part of the shock.
Government absorbs billions to shield consumers
Taiwan’s Ministry of Economic Affairs said the government is expanding commodity-tax reductions, absorbing NT$3.70 per liter for gasoline and NT$2.10 for diesel.
CPC is absorbing another NT$6.80 per liter for gasoline and NT$8.70 for diesel during the September 14–20 period.
Combined, the government and CPC are therefore absorbing NT$10.50 per liter of gasoline and NT$10.80 per liter of diesel.
That intervention is designed to prevent the international oil shock from immediately feeding through to transportation costs, household expenses and business operating costs.
It also helps explain why Taiwan’s pump prices remain relatively low compared with neighboring economies.
CPC said Taiwan’s domestic gasoline and diesel prices remain the lowest among neighboring countries under the current measures.
The bill is getting bigger
Keeping fuel prices artificially low, however, comes at a substantial financial cost.
CPC said that from February 28 through September 13, it will have absorbed approximately NT$19.85 billion through its various stabilization measures.
That is roughly US$628 million based on the exchange-rate conversion reported in related coverage.
The latest increase therefore does not mean Taiwan has stopped shielding consumers.
Instead, it means the government and state-run oil company are allowing a small portion of the rapidly rising international cost to reach consumers while continuing to absorb the bulk of it.
Taiwan had already held prices steady despite rising oil
The decision comes only days after CPC announced that it would keep fuel prices unchanged for the week ending September 13.
At that time, 92-octane gasoline remained at NT$30.50 per liter, 95-octane at NT$32 and 98-octane at NT$34, while premium diesel stayed at NT$29.30.
That was the sixth consecutive week of unchanged domestic prices despite rising international crude prices.
The strategy gave consumers temporary relief.
But continued increases in global oil costs eventually made another adjustment difficult to avoid.
What this means for drivers
For an ordinary driver, the immediate impact is relatively small.
At an additional NT$0.70 per liter, filling a 50-liter gasoline tank would cost approximately NT$35 more than under the previous price.
For diesel users, a 50-liter fill-up would increase by approximately NT$30.
But the bigger concern is not this week’s increase.
It is what happens if the international oil shock continues.
Fuel costs influence transportation, logistics, manufacturing and the prices of goods moved by road.
A prolonged period of expensive crude could therefore create pressure well beyond gas stations.
The Strait of Hormuz remains a critical risk
Taiwan is particularly exposed to global energy-market disruptions because it relies heavily on imported energy.
The Middle East conflict has already disrupted shipping and raised concerns about energy flows through the Strait of Hormuz, one of the world’s most important oil and LNG transit routes.
Recent analysis has noted that roughly one-fifth of global oil and liquefied natural gas shipments normally pass through the waterway.
That makes any prolonged disruption potentially significant for energy-importing economies such as Taiwan.
The issue is not simply how much crude oil costs.
Shipping insurance, tanker availability, transportation routes and geopolitical risk can all increase the final cost of bringing energy to Asia.
Taiwan is spending heavily to cushion the shock
The fuel-price intervention is part of a much broader effort to protect Taiwan’s economy from the energy consequences of the Middle East conflict.
Earlier this month, Taiwan’s Cabinet approved a proposed NT$607.6 billion supplementary budget, with a large portion directed toward energy subsidies and investments designed to shield households and businesses from higher energy costs.
The package includes major financial support for CPC and other energy-related measures.
That illustrates the scale of the problem facing Taipei.
The government is not simply trying to keep gasoline prices affordable.
It is attempting to prevent a global energy shock from spreading into inflation, electricity costs, transportation expenses and industrial production.
The real danger is what happens next
For now, Taiwanese motorists are facing only a modest increase.
But the numbers underneath the price announcement tell a more worrying story.
International oil prices jumped sharply in a single week.
Taiwan’s government and CPC are absorbing more than NT$10 per liter in combined support.
And CPC has already absorbed nearly NT$20 billion since the current stabilization measures began.
If the Middle East conflict continues to disrupt energy supplies and shipping, the pressure on Taiwan’s fuel-price system could intensify.
The question is no longer simply whether gasoline prices will rise.
It is how long Taipei can continue absorbing the difference between what international oil costs and what Taiwanese consumers pay at the pump.
And if the conflict keeps pushing crude prices higher, Monday’s NT$0.70 increase could look like only the beginning.
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