Daegu City Gas Rates Increase by 0.6%... From August, Pay 315 Won More per Month on Average

0.68% Increase for Residential Cooking and Heating

0.34% for Industrial Use · 1.83% for Transportation Use

Daegu City announced on the 27th that it has decided to raise the prices of residential, industrial, and transportation city gas by an average of 0.6% starting August 1.

In April, Daegu City commissioned an external expert organization, the Korea Energy Economics Institute, to conduct a research project to calculate the retail supply cost of city gas. Based on the final report submitted in early July, the city finalized the price increase plan after deliberation by the ‘Daegu Regional Economic Council (Price Subcommittee).’

Daegu City Hall Sangyeok Office

With this adjustment, the average retail supply cost of city gas in Daegu, Gyeongsan, Goryeong, and Chilgok, which are the supply areas of Daesung Energy Co., Ltd., will increase by 0.1542 KRW from 2.2015 KRW per megajoule (MJ) to 2.3557 KRW per MJ.

The final consumer price, which combines the wholesale price sent from Korea Gas Corporation to Daesung Energy and the retail supply cost, will increase by an average of 0.6% from 21.7427 KRW/MJ to 21.8723 KRW/MJ. The megajoule (MJ) unit is a heat unit equivalent to 239 kcal, and the volume unit 1 cubic meter (㎥) equals 42.48 MJ.

Looking at the price adjustment details by usage, the cooking and heating category will increase by 0.68% from 21.6991 KRW/MJ to 21.8472 KRW/MJ, industrial use will rise by 0.34% from 21.3680 KRW/MJ to 21.4408 KRW/MJ, and transportation use will increase by 1.83% from 23.8172 KRW/MJ to 24.2533 KRW/MJ.

A Daegu City official stated, “The cooking and heating gas used in households will increase by 0.68%. The average city gas consumption per Daegu citizen is 2,129 megajoules, and the monthly average increase in city gas fees that Daegu citizens will bear due to this price hike is 315 KRW.”

The main factors for this year’s increase include a significant rise in the return on investment for city gas facilities due to the sharp increase in government bond interest rates in 2022 (390 million KRW), as well as a substantial decrease in city gas sales caused by reduced heating demand due to warmer winter temperatures and the industrial sector’s switch to LPG.

Choi Un-baek, Director of the Future Innovation Growth Office of Daegu City, said, “This adjustment of city gas retail supply costs was made within the minimum range considering the livelihood of low-income households and the stabilization of public prices. We will actively manage and encourage city gas companies to promote demand development and improve management efficiency to reduce supply costs and stabilize prices in the future.”