Wednesday, April 04, 2012

Who should be blamed for oil price hike?

For years the employees of state-owned oil company CPC Corporation had enjoyed their beyond average welfare and bonus until two days ago when the Ministry of Economic Affairs announced a three-dollar per liter price hike. All of a sudden, they found themselves become targets of the public fury over such drastic oil price increase. Few would remain rational for some explanations of basic principles of accounting that the raise of oil prices and the welfare of CPC workers are of different nature, let alone listen to an analysis that oil price surging this time was a direct result of negative impact of domestic politics and long ignorance of international matters.  

Last year was the election year. In order to win, the ruling party implemented a so called “oil price freeze” policy to please the voters. The government would use millions of tax dollars to subsidize CPC Corp. for the price difference. Well, the ruling KMT won the reelection in January this year, but now is the time for the public to pay back what they have overdrawn. It is only human nature that ordinary citizens were reluctant to pay off the loan.

The local media’s deteriorating localized news coverage also prompted to general public’s lack of knowledge about what has happened to the world outside Taiwan. Over ninety percent of our fossil fuel was imported from the Middle East, an area of constant conflicts and tensions. Few local residents have any idea about Iran’s nuclear weapon development in recent years, and fewer know that Israel has long been tempting to take care of Iranian nuclear capability militarily if not for American intervention. Whether the sanction imposed by the West against Iranian oil export to cut off her financial resources to develop the weapon works is still unknown. President Obama recently announced that the U.S. would release some of her strategic crude oil reserve to balance the market price; however, without other industrial nations’ consent to go along, Obama’s unilateral act may not take effect. Let’s not forget that Obama himself is facing his election year. Who knows what he will do to win?

Unless oil is found in the peripheral water of Taiwan or there is a sudden “jasmine revolution” erupted inside Iran, I do not think oil price would drop in the near future. Meanwhile, we may have to tackle the high oil price by using more public transportations or saving fuel consumption as best as we can. And it would drive us nowhere targeting CPC employees for their enviable welfare. 

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