Busan City Freezes City Gas Rates... "There Are Factors for an Increase, but Easing the Burden on Citizens Is the Priority" Says Busan City

The city of Busan will freeze city gas rates this year.

Although there were factors that could have led to a rate increase, the city prioritized "alleviating the burden" on citizens whose wallets have been strained by record-breaking heat waves and an economic downturn.

On September 1, Busan City announced that it will freeze the retail supply cost of city gas for 2025. City gas rates are composed of wholesale rates, which account for 85 to 90 percent of the total, and retail supply costs, which make up 10 to 15 percent. The Minister of Trade, Industry and Energy approves the wholesale rate, while the mayors and provincial governors approve the retail supply cost.

From May to July, the city commissioned an external professional agency to calculate the retail supply cost. Despite clear reasons for an increase-such as declining sales volumes leading to weaker profitability, rising labor costs, and higher pipeline installation expenses-the city reached an agreement with Busan City Gas to freeze the rates. As a result, the average monthly city gas bill per household will decrease by approximately 393 won.

The cost-saving effect is even greater for industrial rates. As wholesale rates, which make up the majority of city gas costs, have continued to decline since the end of last year, the August bill for a typical business, based on average usage, dropped to about 6.43 million won-16.4 percent lower than in December 2024. Busan City Gas plans to absorb the factors for a potential increase internally through cost reductions and by securing large-volume customers.

The city is also working to expand supply. It has secured 10.2 billion won-an increase of 1.1 billion won from last year-as a mandatory investment resource for city gas operators, with plans to extend the supply network to hillside roads and remote areas.

Park Dongseok, Director of the Advanced Industry Bureau of Busan City, stated, "We hope that freezing the retail supply cost of city gas will help reduce the living expenses of citizens and contribute to price stability," adding, "We will continue to create changes that citizens can feel through rational and stable rate management."

Busan City Hall