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KEPCO to hike Q4 electricity rate on high costs, losses

Economy 13:49 September 30, 2022

SEJONG, Sept. 30 (Yonhap) -- South Korea's state power utility said Friday it will raise fourth-quarter electricity rates for consumer and industrial use amid high energy costs and mounting losses.

Korea Electric Power Corp. (KEPCO) said it has decided to jack up the adjusted unit fuel cost -- a key part of the country's electricity rates -- by 2.5 won (US$0.002) per kilowatt hour for the October-December period.

It comes on top of the 4.9-won increase the government has already decided to apply from October.

The planned hike follows a 5 won increase in the unit cost for the previous quarter, which came after two consecutive quarters of freezes. The government approved KEPCO's planned hike of electricity rates earlier in the day.

KEPCO to hike Q4 electricity rate on high costs, losses - 1

In addition, KEPCO will raise electricity rates for industrial users by up to 11.7 percent for the last quarter.

The industry ministry said earlier that it had been considering plans to impose higher rates on high power-consuming companies.

KEPCO said the fee hike is designed to cope with soaring fuel prices and to help induce households and industrial users to save electricity.

The ministry said in a release, "The electricity rate hike is inevitable in order to tide over an energy crisis. "Major countries have come up with rate hikes and other measures to cope with soaring energy prices."

The rate increase comes amid high global oil and other energy prices, which have sent the state utility company's loss snowballing this year, combined with the local currency's weakness against the U.S. dollar.

International oil and gas prices remain high due to the war in Ukraine and other negatives.

In the first half of the year alone, KEPCO logged a net loss of 10.76 trillion won ($7.5 billion), compared with a loss of 549.57 billion won the previous year.

The KEPCO move is feared to stoke inflation. In August, South Korea's consumer prices rose 5.7 percent on-year, slowing from a 6.3 percent surge in July.
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