[Alpha Biz= Reporter Kim Minyoung] The government is considering an increase in city gas rates for residential and commercial use.
According to the Ministry of Trade, Industry and Energy and the Ministry of Economy and Finance on the 23rd, the government is discussing whether to raise city gas rates for residential and commercial use, effective from the 1st of next month, and if so, by how much.
The Ministry of Trade, Industry and Energy believes that an increase to match supply costs is necessary, as the current rates are below cost, leading to significant losses for Korea Gas Corporation (KOGAS). Despite the sharp rise in international energy prices following the Russia-Ukraine war, KOGAS has been supplying gas at 80-90% of its cost.
As a result, the unpaid balance for city gas for residential and commercial use has reached 13.5 trillion won as of the end of March this year. This unpaid balance represents the amount of natural gas import costs that have not been recovered through sales rates, effectively resulting in a loss. While other gas rates for power generation and industrial use, which account for about 30% of the total gas supply, have already been adjusted to reflect the actual supply costs, residential and commercial gas rates have not yet been increased to this level.
AlphaBIZ Kim Minyoung(kimmy@alphabiz.co.kr)
