DISTORTIONS:：Almost half of CPC’s employees earn more than NT$1m a year, but the firm’s large operational scale distorts its personnel costs, a TSU lawmaker said
By Chris Wang / Staff reporter
Tue, Apr 03, 2012 - Page 1
CPC Corp, Taiwan (CPC, 台灣中油) should have first reviewed its high personnel costs and made its oil purchasing contracts transparent, the pan-green camp said yesterday after the state-run firm hiked fuel prices.
The prices of gasoline and diesel products rose by an average of 10.7 percent yesterday, the steepest pace in nearly four years, following a decision by the Ministry of Economic Affairs on Sunday to end a cap on fuel-price increases.
The ministry said the increase represented a “normalization” of prices and a solution for CPC’s recent losses.
The Democratic Progressive Party (DPP) said while it does not oppose reasonable fuel-price increases, the decision should have been made after CPC reviewed its high personnel costs and disclosed its oil purchasing contracts, which have never been made public.
“If CPC fails to act on these suggestions, the DPP will not rule out boycotting the company’s budget,” DPP Legislator Pan Men-an (潘孟安) told a press conference.
“The company has refused to review its floating fuel price mechanism and it is using taxpayers like an ATM, squeezing money out of them whenever it is in the red,” Pan said.
The fuel price increases, as well as hikes to electricity and water costs which are reportedly being considered by the ministry, could push up inflation, Pan added.
“How many companies can distribute year-end bonuses that are equivalent to 4.6 months of pay to every employee, regardless of whether the company makes a profit or not?” DPP Legislator Tsai Chih-chang (蔡其昌) asked.
CPC should stop keeping its oil purchasing agreements opaque by citing confidentiality, Tsai added.
DPP Legislator Yang Yao (楊曜) of Penghu, where many residents earn a living by fishing, said the fuel price increase would have a huge impact on the fishing industry, which is already suffering.
Commodity price increases have been the norm since President Ma Ying-jeou (馬英九) took office in May 2008, DPP lawmakers Hsu Chih-chieh (許智傑) and Chiu Chih-wei (邱志偉) said, adding that Ma should have told the public about plans for the fuel price hike prior to the presidential election.
The price of liquefied natural gas has risen by 33.93 percent since May 2008, while natural gas is up 32.5 percent, gasoline is up 5.64 percent and electricity rates could rise by 50.47 percent, Hsu said.
The Taiwan Solidarity Union (TSU) said Minister of Economic Affairs Shih Yen-hsiang (施顏祥) should step down over his failure to present countermeasures to rising commodity prices.
The TSU also urged that the privatization of CPC be sped up.
TSU party whip Hsu Chung-hsin (許忠信) said CPC Corp is misleading the public when it says that personnel costs only account for 2.2 percent of its total costs because the firm’s large operating scale distorts the comparison.
About 46 percent of CPC employees receive an annual salary of NT$1 million (US$33,900) or more, with more than 1,100 employees earning more than NT$86,000 a month, Hsu said.
In response, Shih said the government had no choice but to impose the substantial hike.
CPC has incurred enormous loses because domestic fuel prices have been lower than actual market prices for many years, Shih told reporters at the legislature.
CPC’s financial burden is a “hidden debt” on the government’s shoulders, he said.
“We cannot let the situation go on, so the decision was necessary,” he said.
Shih said if the increase was not implemented, the public would eventually have to foot the bill for CPC’s debt, which he said stood at several tens of billions of NT dollars.
Meanwhile, Fair Trade Commission Chairman Wu Shiow-ming (吳秀明) said that as long as Formosa Petrochemical Corp (台塑石化) had not discussed any price adjustments beforehand with CPC, the two businesses had not violated fair trade laws.
Additional reporting by CNA