It’s lights off when not in use or a NT$10 (34 US cents) fine in Wu Chia-pei’s household, in anticipation of higher electricity fees next month.
The stay-at-home mother has also traded in her old refrigerator and washing machine for power-saving models. The thermostat for air-conditioning is set at 26 degree Celsius.
“Two necessities have become more expensive at one go, but what can we do but adapt?” she told The Straits Times, referring to higher oil prices and an expected increase in electricity tariffs.
The government said the scrapping of oil and electricity subsidies is unavoidable in the face of rising coal, natural gas and oil prices. Almost all of Taiwan’s oil is imported.
CPC Corp, the government-run oil company, incurred NT$38.6 billion in pre-tax loss last year. As of last month, Taiwan Power Company, or Taipower, a government-run utility and Taiwan’s sole electricity supplier, had accumulated losses of NT$137.6 billion.
Fuel prices rose by an average of 10 per cent from April 2. Come May 15, electricity tariffs will go up by 16.9 per cent for households, 30 per cent for commercial users, and 35 per cent for industrial users.
Some eight million households, one million commercial clients and 210,000 industrial consumers will pay more, according to government estimates.
Electricity rates for Taiwanese households are the second-lowest in the world. After the adjustment, the rates will be higher than South Korea’s but lower than Japan’s, Hong Kong’s and Singapore’s.
“The days of cheap electricity are over, and Taiwan must face this hard fact,” said Economic Affairs Minister Shih Yen-shiang at a press conference to announce the hike earlier this month.
Families and businesses have wasted no time in adapting, with some companies adopting austerity or innovative measures one or two years ago in anticipation of the hikes.
FamilyMart, a convenience store chain with nearly 3,000 outlets across Taiwan, is installing a “power management” system that will help reduce electricity consumption by up to 8 percent, spokesman Yang Sung-chun told The Straits Times.
Staff will be instructed to switch off unnecessary lighting after 10pm, and signboard illumination during the day.
Restaurant chain Wang Steak, which has almost 200 outlets, said it has been using LED bulbs and lots of glass in its new outlets to let in natural light. Spokesman Huang You-hsi said the company has no plans to increase menu prices yet.
The Regent, a five-star Taipei hotel, is using diesel-powered generators to heat water supplies and swimming pools, and has switched to LED bulbs. Its chefs buy seasonal fish directly from fishermen.
Like Wang Steak, it is choosing not to raise prices for now, said its spokesman Chang Chun.
But some industries may have no choice but to charge more. Yao Ta-kuang, chairman of the Taiwan Travel Agent Association, said the daily rental fee for a tour bus could rise by as much as NT$1,000, while fees for inbound travel groups could go up by 5 percent.
Taiwan’s Directorate General of Bud-get, Accounting and Statistics has said fuel price hikes could possibly push inflation past 2 percent this year.
For the Taiwanese, whose salaries have not budged for more than a decade and whose average real wage is lower than it was 13 years ago, it is a bitter pill to swallow.
Already, department stores like Sogo have seen sales of luxury goods dip by about 10 per cent to 20 percent.
Major retailers like PChome are reporting brisk sales in household necessities, including toilet rolls, diapers, bathing and cleaning products, as consumers stock up in anticipation of price increases, reported the Taiwanese media.
Reports on imminent price hikes on everything from cosmetics to betel nuts are rife. The Cabinet has convened a committee on stabilizing prices to crack down on price fixing and hoarding.
To help businesses cope with the rise in costs, the government will issue up to NT$100 billion in low-interest loans to help companies and factories switch to energy-saving equipment.
The Taiwan Institute of Economic Research (Tier) this week lowered its forecast for gross domestic product growth this year from 3.96 percent to 3.48 percent, on its weak export outlook amid global economic uncertainty.
Tier president David Hong said the looming electricity rate hike was factored into the assessment, but it was hard to predict the extent to which prices and consumption patterns would be affected.
Still, Macroeconomic Forecasting Centre director Gordon Sun said the drastic hikes were for the best. The short-term impact on the economy will be harmful, but they will be beneficial in the long term, he added.
