▲ A citizen is looking at an electricity meter in an officetel in downtown Seoul. (Reporter Cho Hyun-ho hyunho@)
The power of the people and the government temporarily suspended the increase in electricity and gas rates in the second quarter. The ruling party and the government decided to announce the adjustment plan after going through a further process of collecting opinions in the future.
The Ministry of Trade, Industry and Energy discussed a plan to adjust electricity and gas rates at the party-government council held at the National Assembly on the 31st.
The government and the ruling party shared the same view on the inevitability of raising electricity and gas rates due to the deterioration of the financial situation of public energy companies, the threat to the stable energy supply base, and the weakening of incentives to save energy, which can occur if energy rates continue to be below cost. However, it also reaffirmed the principle that minimizing the public burden should be considered first.
Through consultations, the government and the ruling party decided to announce a plan to adjust electricity and gas rates as soon as possible after more closely examining the stability of ordinary people’s lives, trends in international energy prices, impact on the economy such as inflation, impact on the bond market, and financial situation of public enterprises. .
The Ministry of Industry plans to have ample opportunities to gather opinions to discuss in depth the need for energy rate adjustment, ripple effects and system improvement plans through meetings with stakeholders such as related ministries, related public corporations, energy experts and consumer groups. said.
Initially, the electricity and gas rate hike in the second quarter had been accepted as a fait accompli, and the extent of the increase was of interest. This is because the deficits of Korea Electric Power Corporation and Korea Gas Corporation were serious. As of the end of last year, KEPCO’s operating loss was about 32.6 trillion won, and KOGAS’ receivables reached 8.6 trillion won.
At the end of last year, the Ministry of Trade, Industry and Energy reported to the National Assembly that in order to resolve KEPCO’s cumulative deficit by 2026, electricity rates should be raised by 51.6 won per kilowatt-hour (kWh) this year.
As a result, the electricity rate in the first quarter of this year rose by 13.1 won per kWh, the highest quarterly increase ever. In the remaining three quarterly rate adjustments, similar hikes are required to meet KRW 51.6 per kWh.
The Ministry of Industry also submitted to the National Assembly a plan to increase gas rates by 10.4 won per megajoule (MJ) this year. This is 1.9 times per MJ, the increase in gas rates last year.
However, considering that the ruling party and the government should prioritize minimizing the public burden, and that international energy prices, especially for LNG (liquefied natural gas) and bituminous coal, have been on a downward trend this year, the increase is not expected to be as large as expected.
An official from the Ministry of Trade, Industry and Energy said, “The increase in electricity and gas rates has a close impact on the lives of the common people, and there are also many things to consider, such as trends in international energy prices and the financial situation of public enterprises.” said.