China National Petroleum Corporation of Taiwan is in financial crisis. Public opinion accuses the capital increase of "treating the symptoms but not the root cause".

China News Service, Taipei, October 29th: Taiwan's PetroChina Co., Ltd. (hereinafter referred to as "China National Petroleum Corporation") may face insolvency. The Democratic Progressive Party authorities claimed to make up for PetroChina's losses and improve its financial structure. However, public opinion on the island questioned that this move was only a temporary solution and did not address Taiwan's energy structure problem of over-reliance on natural gas and rejection of nuclear energy.

CNPC is a public enterprise in Taiwan. Its main business scope includes oil and gas exploration, development, refining and sales, as well as the production and supply of petrochemical raw materials.

According to reports from the Central News Agency, Lianhe Daily and other Taiwanese media, affected by high international energy prices and policy absorption costs, PetroChina has fallen into a financial crisis. As of the end of September this year, its cumulative losses have reached 91 billion yuan (NT$, the same below). CNPC Chairman Fang Zhenren recently stated that by the end of this year, CNPC’s cumulative losses will reach 125.7 billion yuan, approaching the company’s capital of 130.1 billion yuan.

In September this year, the administrative affairs department of the Taiwan authorities proposed that it would allocate approximately 101.4 billion yuan to CNPC and prepare a capital increase of 233.8 billion yuan to enrich CNPC’s working capital, improve its financial structure, and enhance the resilience of natural gas construction.

Taiwan's "Wind Media" previously published a commentary article pointing out that the reason why CNPC needs taxpayers to pay a "huge" amount of money lies in the policies of the Democratic Progressive Party authorities. The article believes that during the period of rising international energy prices, the DPP authorities forced public enterprises such as PetroChina and Taiwan Electric Power Company to absorb costs. In essence, they used taxpayers' taxes to subsidize enterprises and wealthy people who use more energy. The cost did not disappear, and eventually evolved into a "black hole" of hundreds of billions of yuan in capital increase and appropriation.

In May last year, Taiwan's last nuclear power unit shut down. In order to fill the energy gap after the withdrawal of nuclear power, the DPP authorities have significantly increased the proportion of natural gas in power generation. However, most of Taiwan's natural gas relies on imports, with China National Petroleum Corporation being the main procurement and supply entity.

Previously, foreign media reported that the Democratic Progressive Party authorities have agreed to purchase 30% of the natural gas planned for the Alaska Liquefied Natural Gas (LNG) pipeline in the United States. Taiwan media recently reported that Canada has also released natural gas investment opportunities to China National Petroleum Corporation. However, outsiders are worried that such projects will not only have uncertain returns, but will further increase the burden on CNPC and the people of Taiwan.

Zheng Zhengqian, a public opinion representative from the Chinese Kuomintang, believes that if the proportion of natural gas continues to increase, Taiwan's dependence on imported energy will be intensified and the risks to Taiwan's energy security will increase.

Huang Yaohui, a professor at the Department of Finance and Taxation at Taipei University of Commerce, pointed out that if the energy structure and price formation mechanism are not fundamentally revised, relying on subsidies alone will only cover up policy mistakes, and the ultimate price will still fall on the people.