Taiwan's government is asking lawmakers not to cut a big new spending bill meant to keep gas, fuel, and electricity prices from rising, which is good news for households but bad news for state-run energy firms already deep in the red.

Premier Cho Jung-tai asked the legislature to approve extra spending that includes subsidies for state oil company CPC and power utility Taipower, plus a large cash injection for CPC. He argued that keeping fuel and electricity prices stable is essential to protect people's cost of living, especially with global economic conditions shifting fast. Opposition parties are unhappy with the subsidies and have threatened to cut them from the budget.

The financial strain behind this is serious. CPC could rack up losses of over NT$120 billion by year-end, close to wiping out its entire capital base, and its chairman says it cannot keep covering huge spending needs without a capital injection. A lawmaker warned that the company is stuck being told it can't fail, can't raise prices, and can't get its budget approved all at once.

Gas and diesel prices have now stayed frozen for six straight price-review periods, largely because Middle East conflict has pushed global oil prices higher and the government keeps stepping in to absorb the cost instead of passing it to drivers. Natural gas prices for households and industry are also being held flat for November, though power companies will see a small increase to partly reflect higher fuel costs.

Outlook: Expect a political fight in the legislature over these subsidies, with the outcome determining whether fuel and power prices stay frozen for consumers or costs get passed through.