South Korea planned to raise electricity charges by 4.9 percent starting next Monday in a bid to reflect rising prices of raw materials such as crude oil and coal, a government report showed Friday.
According to an e-mailed statement, the Ministry of Knowledge Economy accepted the request from the Korea Electric Power Corp. ( KEPCO) to lift the power rates by 4.9 percent from next Monday.
The acceptance was taken to reflect an increase in fuel costs for power generation stemming from higher prices of commodities such as crude oil, coal and liquefied natural gas (LNG).
The ministry said the hike in electricity bills should have been made by more than 10 percent, but it decided to limit the hike as part of efforts to minimize the burden for companies and households amid fragile economic conditions at home and abroad.
The electricity charges for industrial use will be lifted by 6 percent as the area needs to improve energy efficiency, but the power rates for households and educational uses will be raised by 2.7 percent and 3 percent each, with the rate for general use to be hiked by 3.9 percent.
The ministry estimated that the hike in electricity charges would increase the consumer price inflation by 0.056 percentage point, while driving up the producer price growth by 0.128 percentage point. South Korea's consumer price inflation dropped to 1.5 percent in July, the lowest in more than 12 years.