Government Temporarily Suspends Residential City Gas Price Increase... Concerns Over Inflation

Gas Price Increase for Commercial Heating and Industrial Use
"Possibility of Gas Price Increase Remains Open"
Earlier, Electricity Rates Also Frozen... KEPCO's Total Debt Reaches 200 Trillion Won

The government has temporarily postponed the increase in residential city gas rates. With outstanding payments reaching 13.5 trillion won, the government appears to be delaying the rate hike due to concerns over worsening public opinion amid rising prices.

[Image source=Yonhap News]

On the 1st, the Ministry of Trade, Industry and Energy notified Korea Gas Corporation that residential gas rates will be frozen. As a result of this measure, residential gas rates will remain at 19.4395 won per MJ. However, gas rates for commercial heating and industrial use were each increased.

Korea Gas Corporation is appealing that delaying the residential rate increase could lead to a greater crisis. They argue that without raising residential rates, it is difficult to normalize management. Although international natural gas prices surged after the Russia-Ukraine war, the failure to raise rates in a timely manner has significantly increased Korea Gas Corporation’s outstanding payments.

The government stated that "the possibility of a gas rate increase remains open" and that discussions are ongoing. An official from the Ministry of Trade, Industry and Energy said, "There is a consensus that a rate increase is necessary considering Korea Gas Corporation’s financial situation." They added that depending on the discussion, a rate increase could occur even before September 1.

The government also froze electricity rates at the end of last month. Korea Electric Power Corporation’s total debt amounts to 200.9 trillion won, with interest expenses alone reaching 4 to 5 trillion won. Since the third quarter of last year, the government has been freezing electricity rate decisions, citing reasons such as curbing inflation.