Ministry of Industry: "No Premature Decision on Additional Electricity and Gas Rate Hikes Within This Year"

"With This Increase, KEPCO and Gas Corporation Operating Balance Improves"
"Electricity Committee Independent Research Project to Be Completed Soon"

As the government and ruling party decided to raise electricity and gas rates by 8 won per kWh and 1.04 won per MJ for the second quarter, the Ministry of Trade, Industry and Energy stated that it is not making any predictions regarding the rate increase for the third quarter.

During a Q&A session following a briefing on electricity and gas rate hikes held at the Government Seoul Office on the 15th, Lee Ho-hyun, Director of the Electricity Policy Division at the Ministry of Trade, Industry and Energy, responded to a question about additional energy rate hikes within the year by saying, "We are not making any predictions," and added, "We will make a comprehensive judgment by reviewing global energy price trends, the financial status of energy public enterprises, and the extent of their improvements."

The rate increase amount was decided through consultations between the government and ruling party on that day. When asked whether the decided increase amount, which is lower than the Ministry’s initial request, would cause continued deficits for Korea Electric Power Corporation (KEPCO) and Korea Gas Corporation (KOGAS), the director said, "We have recently tried to comprehensively reflect trends in global energy prices, gas prices, crude oil, and thermal coal prices, and considered the financial outlook of KOGAS and KEPCO along with the burden on the public and the impact on the national economy," adding, "The 8 won increase will certainly have an effect on improving the operating balance and some degree of financial improvement for KEPCO and KOGAS."

Regarding the independence of the Electricity Commission, expert opinions will be sought once the research project is completed. The director said, "Since electricity rate decisions have a significant ripple effect on the overall economy, objective and professional judgment is necessary," and added, "The related research project is expected to be completed soon, and we plan to hear opinions from experts across various fields."

When asked if the self-rescue measures announced by KEPCO and KOGAS on the 12th were sufficient, he said, "They have symbolic ripple effects." Although Minister Lee Chang-yang stated on the 11th that a full review of the funding for Korea Electric Power University is necessary, the director explained that the self-rescue plan from KEPCO did not include a reduction in funding, saying, "I understand that the Energy University is pursuing self-rescue efforts," and added that follow-up measures will be reviewed based on audit results. He said, "The Ministry of Trade, Industry and Energy is conducting an audit on the establishment and operation processes," and "Once the audit results are out, we will comprehensively review them along with the self-rescue efforts being pursued by the Energy University."

Welfare for energy-vulnerable groups will also continue. When deciding the increase amount this time, the government and ruling party expanded energy cashback programs and decided to postpone the application of electricity rate hikes for vulnerable groups by one year. The director explained, "We will continue to propose discount measures for welfare purposes for vulnerable groups," and added, "Although this may affect the financial status of KEPCO and KOGAS, we will make comprehensive judgments and come up with measures."

Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy is announcing the "2023 2nd Quarter Electricity and Gas Rate Adjustment Plan and Support Measures for Vulnerable Groups" on the 15th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Yoon Dong-joo doso7@

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