Gov't, ruling party to meet Monday over hike in electricity, gas rates for Q2

SEOUL, May 14 (Yonhap) -- The government and the ruling People Power Party (PPP) will hold a consultative meeting this week to decide on a hike in electricity and gas rates for the second quarter, officials said Sunday.

The meeting will be held Monday to decide on the extent of an increase in electricity rates, which has been postponed for more than a month, according to officials from the ruling party.

The government and the ruling party are likely to decide to raise the rates by 8 won (US$0.01) per kilowatt hour, higher than the expected 7 won increase, a PPP official told Yonhap News Agency.

The meeting comes as the state-run Korea Electric Power Corp. (KEPCO) announced self-rescue measures last week, including asset sales and a freeze in wages, in a bid to improve its financial soundness amid snowballing losses caused by soaring energy costs.

The government raised electricity rates for the first quarter by 13.1 won per kilowatt hour, the sharpest hike in about four decades, in a move to help KEPCO narrow its losses.

But late in March, the government and the PPP decided to put off the planned announcement of the electricity rates for the second quarter, citing the need for more time to review "related circumstances."

Last year, the government was not able to raise the energy rates enough to cover soaring costs amid high inflation, and growing public burdens over the COVID-19 pandemic and an economic slowdown.

KEPCO logged a record operating loss of 32.63 trillion won in 2022, more than quadruple from a year earlier. Its first-quarter net losses narrowed from a year earlier due to the government's electricity rate hikes and milder increases in global energy prices.

The government and the PPP are also expected to decide to raise the gas rates for the second quarter Monday.

The gas rates were frozen in the first quarter amid public outcry over spikes in heating and energy bills during the winter.
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