[Special Stock] Daesung Energy, LNG Crisis Becomes Reality... Raising 2,450 Won Per Household and 'Just the Beginning'

[Asia Economy Reporter Hyungsoo Park] Daesung Energy is showing strong performance. As Russia's invasion of Ukraine prolongs, liquefied natural gas (LNG) prices are soaring. The Ministry of Trade, Industry and Energy announced that residential and general city gas rates will increase by 8.4% to 9.4% starting next month on the 1st, which appears to have influenced the stock price. This increase had already been announced last year.

At 9:19 AM on the 29th, Daesung Energy was trading at 17,050 KRW, up 11.44% from the previous day.

City gas rates consist of the 'wholesale and retail supply cost,' which includes the raw material cost based on LNG import prices and the supply costs and investment returns of wholesale and retail suppliers. The raw material cost is adjusted every odd month by combining the standard raw material cost and the settlement price, the wholesale supply cost is adjusted every May, and the retail supply cost is adjusted every July.

Residential gas rates will increase by 8.4% starting next month. The residential gas rate will rise from 14.65 KRW per megajoule (MJ) to 15.88 KRW per MJ, an increase of 1.23 KRW. Based on the average household usage, this translates to an increase of 2,450 KRW in monthly gas bills. Commercial rates applied to restaurants and bathhouses will also increase by 8.7% to 9.4%, depending on the industry. This rate hike is a measure to cover Korea Gas Corporation's outstanding raw material costs. The government decided to raise rates three times starting in May last year to recover the unpaid amounts.

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