SME Sector "Electricity Rate Hike, On-Site Shock... Need to Establish SME-Specific Tariff System"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] On the 23rd, the small and medium-sized enterprises (SME) sector expressed concerns over the Ministry of Trade, Industry and Energy and Korea Electric Power Corporation's decision to raise electricity rates, urging the prompt establishment of a dedicated electricity tariff system for SMEs.

The Korea Federation of SMEs stated in a press release that "Following the 45% surge in raw material import prices announced by the Bank of Korea in August compared to the end of last year, the industrial electricity rates for the fourth quarter have increased by about 2.8%, severely aggravating the management difficulties of SMEs."

They particularly noted that "The difficulties faced by root SMEs, where electricity costs account for 15% of manufacturing costs, are intensifying, and the shock on the ground is inevitable."

According to a recent survey by the Korea Federation of SMEs, 88.8% of manufacturing SMEs feel burdened by electricity rates. 51.3% responded that their current electricity usage is at the necessary minimum level and cannot be further reduced.

In response, they said, "In a situation where sales and operating profits have sharply declined due to COVID-19, the increase in electricity rates is further expanding uncertainty on the ground."

Finally, they emphasized, "A dedicated electricity tariff system for SMEs that can mitigate the impact of the electricity rate hike must be promptly established," and urged "a careful and fair reform of the tariff system to ensure that the mid- to long-term energy transition toward renewable energy does not lead to continuous rate increases."

This content was produced with the assistance of AI translation services.