[Special Stock] Korea Electric Power Corporation Falls as Q2 Fuel Cost Adjustment Rate Frozen ↓

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] Korea Electric Power Corporation (KEPCO) is showing a downward trend during trading hours. This is analyzed to be due to growing concerns about its financial structure after freezing the fuel cost adjustment unit price for the second quarter of this year.

At 9:11 a.m. on the 29th, KEPCO was trading at 22,900 KRW, down 1.29% from the previous trading day. Earlier that day, KEPCO was also traded at 22,600 KRW in the early session.

That morning, KEPCO stated, "Although there were factors for adjusting the fuel cost adjustment unit price for the second quarter due to the rise in international fuel prices, considering the need to stabilize the lives of citizens facing difficulties due to the prolonged COVID-19 pandemic and high inflation rates, as well as the fuel cost and climate environment fee increases confirmed in December last year and applied from April, the fuel cost adjustment unit price for the second quarter of 2022 will be maintained at 0 KRW per 1kWh, the same as the first quarter of 2022."

KEPCO had planned to announce the adjustment unit price on the 21st but postponed the schedule once. It is presumed that this was influenced by President-elect Yoon Seok-yeol's pledge to completely cancel electricity rate hikes.

In the securities industry, there is a consensus that the freeze on the fuel cost adjustment unit price will inevitably lead to an expansion of KEPCO's deficit. Previously, Kwon Deok-min, a researcher at Shin Young Securities, said, "The reason for the widening deficit is that the recent rise in energy prices is being passed on as increased costs to KEPCO," adding, "Increasing the fuel cost adjustment unit price is the only realistic way to reduce the company's deficit, making electricity rate hikes unavoidable."

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