Electricity Rate Hike Just the Beginning? ... Focus on Urban Gas and Highway Toll Increases

Possible Consecutive Fare Increases for Public Transportation
Including Buses, Subways, and Taxis

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The recent electricity rate hike has triggered demands for increases in major public utility fees. Within the government, discussions on raising city gas prices are being prioritized.

An official from the Ministry of Trade, Industry and Energy stated, "We have already conveyed to the Ministry of Economy and Finance the need to raise city gas rates in November," adding, "The price of LNG, the raw material, is rising at the fastest pace in history, making it increasingly difficult to bear the costs."

City gas retail prices are linked to the Korea Gas Corporation's wholesale prices, which are determined largely by raw material costs that account for about 80% of the rates.

The JKM, a Northeast Asia LNG price benchmark, surged more than tenfold from $2.56 per million BTU (British Thermal Units) at the end of July last year to $27.49 on the 24th of this month. During the same period, Dubai crude oil prices rose from $43.27 to $72.45 per barrel.

There are also calls for increases in railway fares, and the Korea Expressway Corporation has expressed its intention to propose a toll hike to the government.

The Korea Railroad Corporation has frozen fares for 10 years since raising railway fares by an average of 2.93% in 2011, indicating that demand for fare increases has been suppressed.

The Korea Expressway Corporation plans to request a toll increase from the government.

Due to policies aimed at strengthening the public nature of expressways, toll revenues have stagnated at around 4 trillion won annually, while discounted tolls have been increasing. To resolve this structural issue, raising tolls is considered inevitable.

In addition, there are growing possibilities of increases in local public utility fees such as bus, subway, taxi fares, and water and sewage charges.

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