TAIPEI, Sept 17 (Reuters) - Taiwan will postpone a planned second increase in electricity prices in December until at least October next year, its premier said on Monday, as the island confronts a rapidly slowing economy and rising inflation.
Electricity prices were orginally scheduled to rise in three phases, with the first having already gone ahead in June, a second set for December and a third at an unspecified date, the president’s office announced in May.
“It has to halt until the end of next summer, which means we will review the second phase of the electricity price hikes after Oct 1,” Premier Sean Chen told reporters on Monday.
“During this period, it (the halt) can soothe the pressure on our community, companies and factories; it will help to stabilise commodity prices and will also cushion the impact from QE3 in the U.S. and easings in Europe.”
Electricity prices in Taiwan are set by the government. The June rise was an average 6.7 percent for households and 14 percent for industry.
The government has said the hikes are necessary to meet rising global energy costs that are pushing state monopoly utility Taipower deeper into the red. Ta ipower faces losses this year of T$76. 8 billion ($2.61 billion).
If the delay to the plan means that electricity prices don’t rise at all t hrough 2013, Taipower’s losses would reach T$81 billion th at ye ar, the company’s de puty director Hueiyu Huang tol d Reuters.
Taiwan’s consumer price index posted a 3.42 percent rise in August, its highest monthly reading in four years, coming in well above forecasts as a spate of bad weather and a series of typhoons pushed up the prices of fruit and vegetables and as fuel prices rose.
Taiwan cut its 2012 economic growth outlook last month to 1.66 percent, the eighth time it has lowered the target in a year as demand for its exports continues to slow in Europe, the United States and China.
$1 = 29.4470 Taiwan dollars Reporting by Roger Tung and Clare Jim; Editing by Jonathan Standing