Premier Cho Says Thank CPC — Taiwan's Taxpayers Should Ask Why

As U.S. and Israeli strikes on Iran ignite a broader Middle East conflict and the threat of a closure of the Strait of Hormuz looms over global energy markets, Taiwan is already feeling the impact at the gas pump. Premier Cho Jung-tai (卓榮泰) announced that international price movements would have justified a fuel price increase of NT$15 per liter, but that CPC Corporation — Taiwan's state-owned oil company — had "absorbed" the cost, limiting the actual increase to NT$1.8. He then added a remark that drew widespread attention: the public, he suggested, should thank CPC when they pass a gas station.

The gap between NT$15 and NT$1.8 does reflect real volatility in global energy markets. But the more important question is what CPC's "absorption" actually means. It does not reflect operational efficiency or corporate surplus. It means the company is buying energy at market prices and selling it below cost — a gap covered by taxpayer funds. CPC has already accumulated losses running into the hundreds of billions of New Taiwan dollars, largely through this very mechanism of suppressing prices for political purposes. When Formosa Plastics, a private company, froze its own fuel prices at the same time without fanfare, no one asked the public to thank them. The asymmetry speaks for itself.

Premier Cho's framing — that citizens owe gratitude to a state enterprise for spending their own tax money — reflects a mode of governance in which public resources are repackaged as official benevolence. The government positions itself as the dispenser of favors rather than the steward of public funds. That is not a trivial rhetorical slip. It is a window into how this administration understands its relationship with the people it governs.

The strategic stakes extend far beyond fuel prices. Iran has declared full control over the Persian Gulf and has not needed to lay mines to demonstrate its leverage. U.S. President Donald Trump, after threatening to strike Iranian power infrastructure, abruptly TACO'd — backed down — announcing a five-day ceasefire. The conflict has since settled into a pattern of strategic delay, with U.S.-Iran negotiations deadlocked and no clear resolution in sight.

For Taiwan, a prolonged closure of the Strait of Hormuz would not merely be an inconvenience. Approximately 12 percent of Taiwan's natural gas imports pass through that chokepoint. The strikes have already claimed Qatar's largest oil field, with market analysts warning this crisis could surpass the severity of the previous two oil shocks. Beyond energy, the semiconductor supply chain depends on materials — including helium, sulfuric acid, and nitrogen-based compounds — that are also at risk. A sustained blockade could produce a simultaneous failure across power supply, gas supply, and critical manufacturing inputs. This is not a remote scenario. It is a foreseeable convergence of vulnerabilities that Taiwan has done little to address.

Across Southeast Asia, governments have already begun responding to the crisis with concrete measures: mandatory work-from-home policies, compressed four-day work weeks to reduce fuel consumption, and expanded energy subsidies to stabilize consumer prices. The Lai administration's response has been to announce a price freeze and expand LNG receiving terminal capacity — infrastructure improvements that are appropriate in peacetime but structurally inadequate under blockade conditions. Large storage tanks, in a conflict scenario, become high-value targets rather than strategic buffers.

The Lai administration has recently signaled a modest shift in its stance on nuclear energy. But a tentative rhetorical adjustment is not a policy. If nuclear power is not formally designated as a strategic baseload reserve — an insurance layer for precisely the kind of supply disruption now unfolding — then Taiwan's energy security rests on a natural gas infrastructure that could be rendered inoperable within days of a serious blockade. Under that scenario, critical energy shortfalls and economic paralysis could materialize within the second week.

Taiwan's economic performance last year was substantially driven by AI-related semiconductor demand, and the Lai administration was not shy about taking credit for it. That growth story depends on uninterrupted power and an intact supply chain. Both are now at risk. Inflation combined with an energy crisis and semiconductor supply disruption is a plausible path to the unwinding of the AI-driven boom that the government has treated as a political asset. The administration has not offered a credible account of how it would prevent that outcome.

If Premier Cho genuinely wishes to acknowledge CPC's role in stabilizing fuel prices, there is a responsible way to do it: explain transparently what the subsidy costs, where the money comes from, and what the long-term fiscal consequences are. Tell the public honestly why electricity prices will need to rise. Commit to structural reform of state-owned enterprises so that CPC is managed as a professional energy company rather than as a political instrument for price suppression. These are the obligations of a government that takes the public seriously.

What the Premier offered instead was a request for gratitude — directed at a state enterprise that is spending public money to perform a function the government has assigned to it. Taxpayers are not the beneficiaries of CPC's generosity. They are funding it. Asking them to say thank you is not a communication strategy. It is a confession about how this government sees the people it serves.

Taiwan's energy vulnerabilities are real, structural, and now acute. The Middle East conflict has not created them, but it has made them impossible to ignore. The Lai administration faces a genuine test of economic and strategic resilience — and so far, it has responded with price freezes, infrastructure announcements, and a request for public gratitude. That is not a plan. It is a posture. And Taiwan's circumstances no longer have room for the difference.

Original Article in Chinese

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