Electricity Rates Followed by 1.8% Increase in City Gas Charges

From April 1, residential gas rates will increase from the current 14.22 KRW per megajoule (MJ) to 14.65 KRW per MJ, a rise of 0.43 KRW, following the recent increase in electricity rates. The general-use rates applied to self-employed businesses such as restaurants will increase by 0.17 KRW.

The Ministry of Trade, Industry and Energy announced on the 31st that from next month, the city gas rates for residential and general use by the general public and self-employed will rise by an average of 1.8%. This is the first time the government has raised city gas rates since the reduction in July 2020, after 1 year and 9 months.

With the rate hike, from next month, the residential rate will increase by 0.43 KRW from the current 14.22 KRW per MJ to 14.65 KRW. The general-use rate will be adjusted to 14.26 KRW, up 0.17 KRW, considering the reduction in supply costs. The increase rates are 3.0% for residential and 1.2?1.3% for general use. Due to this increase, the average monthly gas bill per household is expected to rise by about 860 KRW, from 28,440 KRW to 29,300 KRW based on Seoul city standards.

The government’s decision to raise city gas rates is due to a sharp increase in prices caused by a decrease in natural gas supply following economic sanctions against Russia amid the Russia-Ukraine war. As of the end of last year, unpaid balances for residential and general use gas, which stood at 1.8 trillion KRW, have been rapidly increasing. The unpaid balance refers to the amount of liquefied natural gas (LNG) costs imported by the Korea Gas Corporation that have not been fully recovered through fees, occurring when the LNG import price is higher than the selling price.

According to customs export-import trade statistics, the Northeast Asia natural gas spot price (JKM) in February this year was 32.84 USD per mmbtu (unit of heat), about four times higher than the same month last year. Electricity rates are also expected to increase, further burdening the low-income economy. Electricity rates will rise by 6.9 KRW per kWh (kilowatt-hour) starting next month.

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