Government Freezes Fuel Cost Adjustment Unit Price for Q2... Only 6.9 Won Increase in Preliminary Notice

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Dongwoo Lee] The government and Korea Electric Power Corporation (KEPCO) have frozen the fuel cost adjustment unit price for the second quarter.

KEPCO announced on the 29th through its website that the fuel cost adjustment unit price for April to June has been finalized at 0 won/kWh (kilowatt-hour).

The fuel cost adjustment unit price is a system designed to raise or lower electricity rates quarterly based on the purchase costs of fuels such as oil, coal, and liquefied natural gas (LNG) to supplement KEPCO's financial structure. KEPCO had previously measured the second quarter fuel cost adjustment unit price at 33.8 won/kWh and submitted a proposal to the government to increase it by 3.0 won/kWh, applying the quarterly adjustment ceiling.

However, the government decided to maintain the fuel cost adjustment unit price at 0 won per kWh from the fourth quarter of last year through the second quarter of this year, due to concerns about the burden from rising prices.

KEPCO stated, "We were notified to maintain the fuel cost adjustment unit price at 0 won, considering the need to stabilize the lives of citizens suffering from the prolonged COVID-19 pandemic and high inflation rates, as well as the increase in the standard fuel cost and climate environment charge to be applied from April."

By freezing the fuel cost adjustment unit price, the immediate additional burden on households can be alleviated. However, KEPCO's management burden, which is expected to incur a record loss of 20 trillion won this year, is likely to increase further.

Separately from the fuel cost adjustment unit price freeze, the electricity rate increase of a total of 6.9 won per kWh, including the standard fuel cost of 4.9 won and the climate environment charge of 2.0 won decided last year, will proceed as scheduled from next month.

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