Busan City Gas Rates to Drop Sharply

Average 13% Reduction in Residential and Industrial Rates from August 1
Annual Savings of 120 Billion Won... Support Effects for Low-Income Households and Businesses

Consumer Rates for City Gas by Usage.

[Asia Economy Yeongnam Reporting Headquarters, Reporter Kim Yong-woo] Urban gas prices in the Busan area will be significantly reduced.

Busan City announced on the 30th that it will reduce urban gas prices by 13% starting August 1st to ease the economic burden on citizens struggling with their livelihoods due to the novel coronavirus infection (COVID-19).

The city commissioned an external expert agency to determine this year's urban gas prices. Although there were factors for price increases such as a 2.1% decrease in industrial volume sales due to COVID-19 and a 2.9% rise in the minimum wage, the city decided to significantly lower urban gas prices to secure the competitiveness of the economy and local industries.

In April, Busan City proposed to the Ministry of Trade, Industry and Energy to support the reduction of wholesale rates for industrial use and to induce self-management rationalization by drastically lowering depreciation costs for Busan Urban Gas Company's supply facilities. As a result, the supply cost was set 2.36% lower than the consumer price (2.0841 KRW/MJ) submitted by the commissioned report, making the price reduction possible.

Consequently, the city induced an 11% reduction in residential rates and a 14-16% reduction in industrial rates. Overall, urban gas consumer prices were reduced by an average of 13% across all usage categories, enabling the supply of urban gas at a cheaper and more stable rate.

With this adjustment, Busan City's urban gas residential rates are expected to save approximately 49.6 billion KRW annually, industrial rates 34.1 billion KRW, and other uses 35.3 billion KRW, totaling about 120 billion KRW in annual savings.

Byun Sung-wan, Acting Mayor of Busan, said, “It is fortunate that urban gas, a basic fuel for citizens, is being supplied at a low cost during a difficult time due to COVID-19.”