With the government highly concerned that fuel price fluctuation could influence the costs of other products, Vice Premier Mao Chi-kuo convened the Executive Yuan's commodity price stabilization task force today to discuss counter-measures.
Domestic goods prices are stable for now and should continue to be so in the short term, as the supplies of bulk materials are gradually stabilizing in global markets. According to the task force's latest data, nothing out of the ordinary happened to the prices of 17 core products between January and early- to mid-February. Rice, flour, pork, chicken, eggs, bread and laundry detergent became slightly more expensive, and soy sauce, sugar, cooking oil, milk, milk powder, instant noodles, tissues, toiletries, toothpaste and shampoo slightly less.
Oil prices are recovering on the back of the global economic recovery, however, and unpredictable factors like geopolitics and the movement of the U.S. dollar could trigger major fluctuations in the future.
The U.S. Department of Energy projected this month that the average price of Brent Crude from the North Sea will be US$109.33 per barrel in 2013 but lower in 2014, at US$100.75 per barrel, the Ministry of Economic Affairs reported. Both numbers would represent a marked decrease from the February 25 price of US$114.55. (The Brent index is the price benchmark for two thirds of international crude oil shipments.)
In response to oil price fluctuations, the government has provided gasoline subsidies for mass transit, regular taxis and taxis for the disabled. This program will have been in action for three months on March 31. Before then, it will be reviewed in light of prevailing oil price trends.
As changes in international agricultural and industrial raw material costs gradually affect domestic goods prices, Mao asked agencies to keep a close watch on both and quickly implement stabilizing measures when necessary. He also asked the Council for Economic Planning and Development to report at a later time on import and export price changes and wholesale price trends, which are affected by currency exchange rates.