Ruling Party and Government Delay Price Hike, Plan 28 Trillion Won Restructuring of KEPCO and Gas Corporation

KEPCO and Gas Corporation Report Plans to Raise 14 Trillion Won Each by 2026

Korea Electric Power Corporation (KEPCO) and Korea Gas Corporation (KOGAS) will embark on a restructuring worth 28 trillion won by 2026. This move comes as the ruling party and government have temporarily postponed electricity and gas rate hikes in the second quarter, and they are launching a stringent austerity management effort to cover the snowballing deficits.

On the 6th, Park Dae-chul, Policy Committee Chairman of the People Power Party, stated in a briefing after a party-government meeting at the National Assembly, "We will sell non-core assets and invest in business expenses within the scope of maintaining supply stability, adjusting the timing of such investments," adding, "Through high-intensity austerity management and cost reduction, we plan to aggressively secure a total of 28 trillion won by 2026, combining 14 trillion won each from the two corporations."

On the same day, the party and government received reports on the financial status and self-help measures of KEPCO and KOGAS at the National Assembly. Earlier, in his opening remarks at the meeting, Chairman Park emphasized, "Energy public enterprises must continue restructuring until the public says 'enough is enough.' Stabilizing the future energy supply base, stabilizing consumer prices, and minimizing the public burden are not conflicting issues. We will seek solutions through triangular cooperation." The triangular cooperation proposed by Chairman Park includes robust support for vulnerable groups, drastic restructuring of energy public enterprises, and voluntary energy-saving participation by the public.

Additionally, opinions from private organizations and experts regarding energy rate hikes were heard. Previously, the party and government decided at a meeting on the 31st of last month to temporarily postpone electricity and gas rate increases and stated they would make a decision after gathering public opinion through expert roundtables. This meeting was part of that opinion-gathering process.

Experts unanimously agreed that normalizing energy rates is urgent but requires sufficient explanation. Professor Cho Hong-jong of Dankook University’s Department of Economics said, "Many people are unaware that gas prices have risen from 99 cents to 99 dollars. The deficits of energy companies have eroded operating profits from the 2nd to the 8th largest domestic companies," and argued, "Citizens must share the pain." Professor Yoon Tae-yeon of Sunmoon University’s Department of Global Economics emphasized, "We must not overlook the negative perception of energy rates themselves."

Consumer and small business groups voiced concerns about the burden of energy costs. Hong Hye-ran, Secretary-General of the Energy Citizens’ Solidarity, said, "Why are KEPCO and KOGAS’s debts being passed on to the public? If unavoidable, the public must be thoroughly informed."

Park Il-jun, Vice Minister of the Ministry of Trade, Industry and Energy, mentioned the unpaid bills and accumulated deficits of KEPCO and KOGAS, the Russia-Ukraine war, and OPEC Plus’s production cut decisions, stating, "Rate normalization is necessary," but also said, "We will faithfully reflect today’s discussions in future rate adjustment plans."

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