From August, 'Residential City Gas' Rates to Increase by 6.8%... "Monthly Increase of 3,770 KRW for a 4-Person Household in Seoul" (Update)

Gas Corporation "Decided Minimum Increase Considering Public Burden"

From the 1st of next month, residential city gas rates will increase by 1.41 KRW.

Korea Gas Corporation announced on the 5th that the wholesale price of city gas for residential use, effective from August 1, will be raised by 1.41 KRW (6.8%) per MJ (megajoule). The wholesale price for general use will increase by 1.30 KRW.

Following the adjustment of city gas rates, the Gas Corporation expects that the monthly gas bill for a four-person household in Seoul (residential use) will increase by approximately 3,770 KRW (including VAT).

A gas meter in a residential area in Seoul. Photo by Hyunmin Kim kimhyun81@

The wholesale price for civilian use (residential and general) has been frozen since a 5.3% increase (1.04 KRW/MJ) in May last year. A Gas Corporation official stated, "This decision was made to improve the deteriorated financial condition of the Gas Corporation caused by continued supply below cost, while minimizing the increase considering the burden on low-income households." He added, "Currently, the debt ratio exceeds 600%, and interest expenses arising from unpaid bills exceed 500 billion KRW annually. This rate increase was an unavoidable decision to ensure stable natural gas procurement."

Since the outbreak of the Russia-Ukraine war, the Gas Corporation's unpaid city gas bills for civilian use surged from 1.8 trillion KRW at the end of 2021 to 8.6 trillion KRW at the end of 2022. Despite one rate increase last year, the amount has continued to rise from 13 trillion KRW in 2023 to 13.5 trillion KRW in the first quarter of this year.

The Gas Corporation plans to actively identify more beneficiaries for the heat efficiency improvement project, which targets social welfare facilities and low-income households, expanding the number of sites tenfold to 2,350 from next year through 2027. This project improves energy efficiency by replacing boilers, insulation materials, and windows in aging buildings. The Gas Corporation expects that this expanded support policy will reduce heating costs during the winter season (October to March) by 10% per household for vulnerable groups.

A Gas Corporation official said, "We will continue to minimize factors leading to rate increases while persistently promoting support for vulnerable groups and win-win cooperation projects to ensure that no energy welfare blind spots occur."