"Busan City Gas Rates Frozen for 5 Consecutive Years!"

Busan City’s Special Stability Measures for the Livelihood Economy in the Era of High Inflation and High Interest Rates

Busan City Hall.

[Asia Economy Yeongnam Reporting Headquarters Reporter Dongguk Lee] Busan City has decided to freeze city gas rates starting August 1st to alleviate the household economic burden on citizens amid the era of high inflation and high interest rates.

At the ‘Livelihood Economy Stabilization Measures Meeting’ held on July 14th, Mayor Park Hyung-jun announced that seven types of public utility fees, including city gas, would be frozen through this year, and as the first step, the city gas rates, which are most closely related to citizens' daily lives, were frozen.

With this decision, city gas rates have been frozen for five years since the increase of 0.0384 KRW/MJ in 2017.

The external expert agency’s service conducted in May for the ‘2022 City Gas Rate Determination’ revealed various factors for rate increases such as the rise in raw material costs for meters due to high inflation, minimum wage increases, and increased maintenance costs for supply pipes.

Despite these upward factors, the city and Busan City Gas sought ways to freeze city gas rates to help restore citizens' economy and the competitiveness of local industries. The management rationalization plans proposed included ▲adjusting the useful life of supply facilities ▲minimizing labor cost increases ▲deferring adjustments of raw material cost increases ▲reducing fees and welfare expenses.

According to the proposed plans, the calculated supply cost (2.0349 KRW/MJ) was 7.42% lower than the consumer rate (2.1981 KRW/MJ) from the service results, leading to the decision to freeze city gas rates.

This city gas rate freeze has created an environment where city gas, a basic fuel for citizens' lives, can be supplied affordably and stably, providing an opportunity to revitalize the low-income economy and invigorate local businesses amid the recent high inflation era.

Mayor Park Hyung-jun said, “I hope that freezing city gas rates will help citizens even a little during these times when citizens' lives are becoming difficult due to the prolonged COVID-19 pandemic and recent high inflation,” and added, “We will continue to actively pursue policies that empower citizens to stabilize the livelihood economy.”

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