TAIPEI, May 27: Taiwan’s premier unexpectedly announced on Tuesday fuel price hikes of up to 16 per cent by the island’s key state-owned petrol firm to combat hoarders, as Asia grapples with soaring crude prices.

Premier Liu Chao-shiuan said state-run CPC Corp., which supplies most of Taiwan’s petrol, would raise unleaded gasoline prices by 13 per cent and diesel by 16 per cent from Wednesday, ahead of expectations of hikes in early June.

“The price hike will become effective from Wednesday in order to ease the widespread mentality caused by an expected upward price adjustment,” Liu told reporters.

Motorists have been queuing up at CPC gas stations, some clutching plastic containers to buy even more fuel, after Taiwan’s new government last week said it would scrap a freeze on gasoline prices from June 2.

The price of unleaded gasoline will rise to 33.9 Taiwan dollars per litre from 30 dollars. The price of diesel fuel jumps to 31.9 dollars per litre from 27.5 dollars.

The move comes as some Asian governments struggle to afford energy subsidies or fuel price caps following a record-breaking surge in crude oil prices.

Liu said gasoline prices could be raised again in July as the fuel price hike announced on Tuesday covered only 60 per cent of the recent increase in crude prices.

He said the government would in effect absorb 20 per cent of the crude price increase by cutting its tax on petroleum products, while CPC would absorb the remaining 20 per cent, in order to alleviate the domestic inflationary pressure.—AFP