TAIPEI (Taiwan News) — The Ministry of Economic Affairs will step up measures to bolster the domestic petrochemical supply amid the Iran war, including temporarily freezing liquefied petroleum gas prices and working with petrochemical giants to prioritize domestic supply.
The ministry said it will cooperate with local governments to monitor supply. It has also coordinated with CPC Corp. and Formosa Petrochemical to bolster domestic feedstock supply to try to ease the impact on downstream manufacturers, including producers of plastics, rubber, and chemical products, per CNA.
According to the Cabinet, CPC will not raise household natural gas or bottled gas prices in April to prevent a rise in overall prices. Formosa Petrochemical said it will also keep its gas cylinder prices unchanged in April.
Formosa Petrochemical noted that its ethylene and propylene production, key materials for plastics and rubber manufacturing, is mainly supplied to other subsidiaries of its parent company, Formosa Plastics Group. Exports to China and Southeast Asia will be halted.
In addition, Formosa Petrochemical mainly imports crude oil and light oil from the Middle East to produce butadiene, another key material for plastics and rubber. The company added it will seek alternative imports from West Africa to ease the impact of the war.
CPC plans to step up light oil cracking at its Kaohsiung facility starting in April. The move will increase ethylene supply from 60,000 tonnes to 79,000 tonnes monthly, boosting availability for makers of plastics, rubber, and chemical products.
CPC’s Kaohsiung light oil cracking facility has been in operation for more than 40 years. In May 2024, the Cabinet said it will spend NT$106.2 billion (US$3.3 billion) to expand the facility and upgrade its existing equipment.
The ministry said that domestic stocks of solvents and raw materials for sectors such as coatings, printing, and cleaning will last through August. It added that retail supplies of plastic packaging are plentiful and warned businesses against hoarding materials or raising prices.
Vice Premier Cheng Li‑chun (鄭麗君) said the government will set up an online platform allowing plastic, packaging, and medical product makers to report material shortages. The government will use these reports to help coordinate supplies to affected businesses.
