The ruling People’s Power Party (PPP) and the government have agreed to temporarily postpone the increase in electricity and gas bills, but reaffirmed that rate hikes are “inevitable,” a lawmaker from the ruling party said on Friday.
The decision was made at a policy consultation meeting amid concerns that an increase in utility rates could add financial burdens to people amid high inflation and an economic slowdown.
Rep. Park Dae-chul, the PPP’s chief policymaker, said the government will decide on the rate hike after conducting additional assessments of international energy prices and discussions with experts.
Park still said that the ruling party and the government reached a consensus that the rate hike could not be considered any further.
“We reaffirm once again that an increase in electricity and gas bills is inevitable,” Park said. “But more discussion is needed about the timing and scope of the rise among the multiple options suggested by the Ministry of Industry.”
The government raised electricity rates for both consumer and industrial use in the first quarter by 13.1 won ($0.01) per kilowatt hour (kWh), the steepest rise in about four decades, while froze prices of natural gas in the first quarter to minimize the burden on the public, particularly during the winter.
The move came as Korea Electric Power Corp. (KEPCO) suffered a record operating loss of 32.63 trillion won last year, more than four times year-on-year, amid limited power rate increases and rising global prices. of the fuel.
In 2022, the electricity rate increased by 19.3 won per kWh, and the government froze rates during the first and second quarters of the year amid the COVID-19 pandemic and high inflation.
In a report submitted to the National Assembly, KEPCO requested rate increases of 51.6 won per kWh this year.
The government also stressed the need to increase gas bills, as Korea Gas Corp. had around 5 trillion won in uncollected payments last year.
But President Yoon Suk Yeol said last month that the government plans to freeze utility rates in the first half of this year to help ease the economic burden on people.
“Increases in electricity and gas rates are inevitable, as the financial health of public power companies will worsen and damage the country’s stable power supplies if power rates continue to fall below production costs. But the government will also ensure that minimizing public charges is the priority,” the Ministry of Industry said in a statement.
Industry Minister Lee Chang-yang said earlier that the government should take steps to “normalize power tariffs in phases in accordance with market principles,” while pushing the transition to a low-power, high-power structure. efficiency, noting that world natural gas prices shot up to 10 times due to the Ukraine crisis and other factors last year.
https://www.koreatimes.co.kr/www/nation/2023/03/356_348198.html
Category: Korea
