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Electricity and gas rates that were said to be frozen… Rising after the presidential election

A meter in a building in downtown Seoul. yunhap newsElectricity and gas rates, which were frozen in the first quarter of 2022, will be raised from the second quarter, when the presidential election ends.

The government decided to freeze utility rates, including electricity rates, until the first quarter of next year in consideration of the burden of inflation, but decided to raise electricity and gas rates in April and May of next year, just one week after the policy was announced.

KEPCO announced on the 27th that it would raise the standard fuel cost by 9.8 won per kilowatt-hour (kWh) in two rounds: 4.9 won in April and 4.9 won in October. The standard fuel cost is determined according to the fuel cost trend in the preceding year. From December of last year (2020) to November of this year, international oil prices, bituminous coal, and natural gas prices all recorded double-digit growth rates, so KEPCO’s position is that an increase in the standard fuel cost is inevitable. At the same time, the climate environment fee, which reflects environmental policy costs, will also increase by 2 won from the current 5.3 won per kWh to 7.3 won from April next year.

KEPCO estimated that the electricity rate will rise by 5.6% next year if the factors of increase are included. The monthly average electricity bill burden for a four-person household (based on average monthly consumption of 304 kWh) will increase by KRW 1950.

Electricity bill.  yunhap newsElectricity bill. yunhap newsKorea Gas Corporation will also raise the unit price of gas per megajoule (MJ, unit of heat used by gas) three times next year to 1.23 won in May, 1.9 won in July, and 2.3 won in October next year. The mediation plan was decided and announced. The gas fee is calculated by adding the fuel cost and supply cost to the settlement unit price.

If this adjustment plan is applied, the average monthly consumption burden of consumers will increase by 2460 won in May, 1340 won in July, and 800 won in October, respectively, based on the average monthly usage of 2,000 MJ. Based on the average monthly usage of 2,000 MJ, the total monthly average burden will increase by 4,600 won from the current 28,450 won to 33,050 won in October next year.

A week after the government announced on the 20th that it would freeze public rates in the first quarter of 2022, the government announced that it would raise rates from the second quarter, and in light of the upcoming presidential election, is not the timing of the increase adjusted as a way to avoid public backlash? is pointed out

Although it is an unavoidable measure for the financial soundness of KEPCO and KOGAS, market liquidity has increased significantly due to the COVID-19 pandemic and the supply of raw materials has also increased, leading to a sudden increase in consumer prices and a rise in utility rates. is expected to increase further.

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