Kang Suhoon, Gwangju City Council Member, "Specific Verification Needed for Urban Gas Supply Cost Calculation"

Kang Su-hoon, a member of the Gwangju Metropolitan Council (Democratic Party·Seo-gu 1), argued that a specific verification is needed for the city’s annual research service on the calculation of city gas supply costs.

On the 7th, during the administrative audit of the Artificial Intelligence Industry Office under the Industrial Construction Committee of the Gwangju Metropolitan Council, Councilor Kang stated, “The executive branch is passively watching the verification of city gas supply costs, which are calculated annually through research services by accounting firms and others,” and added, “Regarding the recent controversy over city gas price increases, the issue should not be concluded with a freeze but should also provide grounds for a reduction.”

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He continued, “In the past five years, there have been opinions for annual increases in the city gas supply cost calculation research results, but the executive branch has not conducted specific reviews, citing economic conditions such as COVID-19,” and pointed out, “Although the final decision on city gas prices lies with Gwangju’s Price Countermeasure Committee, the committee has not held a single discussion related to city gas costs in the past five years.”

City gas prices are approved by the Minister of Trade, Industry and Energy for wholesale prices, where Korea Gas Corporation imports natural gas and supplies it to city gas companies, and by the mayor or governor for retail supply costs, where city gas companies supply to households, companies, and other local areas nationwide.

The retail supply cost of city gas is calculated once a year by the mayor or governor through research services by accounting firms or others, and the retail supply cost of the respective city gas business operator is approved.

Councilor Kang said, “In the case of Busan, in 2020, despite factors for city gas price increases identified through external expert institution research for realistic city gas price decisions, there was a case where the price was reduced by as much as 13%,” and argued, “Before a boomerang effect of a larger scale price increase occurs, Gwangju should prepare by presenting a specific verification roadmap for the city gas supply cost calculation research service.”

In response, Kim Yong-seung, head of the Artificial Intelligence Industry Office, said, “Recently, Mayor Kang Ki-jung’s statement that ‘there has been no specific review’ means that there has been no instruction for additional increases,” and added, “Considering the situations of Marine Energy and other cities and provinces, we are currently reviewing city gas cost increases both practically and politically.”

He also said, “We acknowledge that there are practical limits to reviewing each company’s break-even point in verifying the city gas supply cost calculation research service, and that a procedure for verification by an external expert institution is also necessary.”

Councilor Kang Su-hoon added, “The Gwangju city executive branch should not leave the adjustment of city gas supply costs solely to the Price Countermeasure Committee as a game of hot potato,” and emphasized, “A system should be established to verify the procedural validity of the city gas supply cost calculation research service, and a city gas expert should be appointed to strengthen the function within the Price Countermeasure Committee.”

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