CPC Taiwan is nearing a financial breaking point, according to board director and Southern Taiwan University of Science and Technology professor Wei Hui-shan, who said the state-owned oil company could face a situation in 2027 where its assets are no longer enough to cover its liabilities if this year’s losses do not stop and international energy prices remain high.
Wei said that, under Taiwan’s Company Act, the board would then be required to petition a court for restructuring.
TWD 850 billion in debt and annual interest costs in the tens of billions
Wei said CPC is currently carrying TWD 850 billion in interest-bearing debt, with annual interest expenses alone reaching roughly TWD 10 billion to TWD 20 billion. In her account, that interest bill has already become a heavy fixed cost on its own.
She said that if the Ministry of Economic Affairs’ planned capital injection and subsidies are fully disbursed, CPC’s debt ratio could fall from close to 90% back to a little above 60%, roughly returning to the level seen before the pandemic and before the outbreak of the Russia-Ukraine war. She added that the extra 30 percentage points in leverage were largely the cost of absorbing frozen energy prices for the public over the past few years.
Wei points to 2022 as the turning point
Wei said CPC had already started losing money in 2020 because of the pandemic, labor shortages and surging raw material costs. But she described 2022 as the real turning point. After Russia invaded Ukraine, natural gas prices jumped sharply, and CPC was required to absorb most of the added cost, leading to a loss of more than TWD 200 billion in a single year.
That pushed the company’s debt ratio from a little above 60% to above 90%, she said, and it has barely come down over the following three years, staying around 92% to 93%.
The report also noted that Taiwan Power Co. was disclosed in June 2025 to have accumulated losses of more than TWD 450 billion, with net asset value per share down to TWD 2.7. Under policies that froze electricity and fuel prices, the companies carried the losses themselves, even though the savings seen by consumers at the pump or on utility bills may later return as fiscal spending through capital injections and subsidies.
Internal estimate shows another TWD 56.3 billion loss this year
According to CPC’s internal estimate, if natural gas prices stay at September levels and international crude prices remain near $90 a barrel, the company could post another after-tax loss of TWD 56.3 billion this year. That would push accumulated losses to more than TWD 126 billion, a figure the report said is approaching the level of shareholder-paid-in capital.
Wei said that if energy prices keep swinging at elevated levels, a balance-sheet shortfall in 2027 would no longer be just a hypothetical scenario but a likely outcome.
Potential impact goes beyond the balance sheet
Wei said the consequences of insolvency would not be limited to financial statements. CPC’s international credit rating could be downgraded, she said, and overseas sellers of crude oil and natural gas could demand stricter collateral terms before agreeing to deals. That would directly raise procurement costs, reduce bargaining room and affect the stability of energy supply.
She said CPC has already felt that pressure since its debt ratio moved above 90% in 2022, with tighter guarantee requirements and higher costs creating a cycle in which losses make procurement more expensive, and higher procurement costs deepen losses.
Wei also said a capital injection can ease the immediate burden of interest payments, but it does not break that cycle because it only changes the form of the liability, turning interest-bearing debt into equity. In her view, the structural causes of losses, including frozen-price policies and energy costs, remain untouched. If international oil prices do not fall and the freeze policy is not adjusted, a similar funding gap could reappear in a few years.
Capital injection and subsidies are meant for different gaps
The Ministry of Economic Affairs has planned two separate items in its 2026 supplementary budget: TWD 238.8 billion for a capital injection into CPC, and another TWD 108.9 billion in subsidies tied to frozen prices for gasoline, diesel, natural gas and bottled LPG.
Wei said the two should not be treated as duplicate support because they serve different purposes. The subsidies are meant to cover the extra energy costs CPC absorbed under the price-freeze policy, including more than TWD 59 billion tied to natural gas and TWD 42.3 billion tied to oil products. The capital injection, by contrast, is intended to repay old debt and lower interest costs.
From the public’s perspective, retail fuel prices did not rise in step with international oil prices, making it appear that the government had absorbed the pressure. But on CPC’s balance sheet, Wei said, that price gap did not disappear. It was recorded as debt and accumulated losses, and would ultimately still be borne by taxpayers through capital injections and subsidies.