ID :
60061
Mon, 05/11/2009 - 19:12
Auther :

Gov't considers raising electricity, gas prices in H1

SEOUL, May 11 (Yonhap) -- The government is considering a move to raise
electricity and gas prices within the first half of the year to help utility
companies make up for past losses, an official said Monday.
Vice Knowledge Economy Minister Kim Young-hak told reporters that appreciation of
the Korean won has not really helped power companies reduce losses, while a
steady rise in international crude oil prices is starting to offset benefits
caused by advantageous foreign exchange rates.
Seoul had limited gas and electricity price hikes last year and this year to
prevent a rise in consumer prices amid a weak economy. Such measures have caused
mounting losses for companies like the Korea Electric Power Corp. (KEPCO) and
Korea Gas Corp (KOGAS).
All local utility prices are controlled by the government, with the Ministry of
Knowledge Economy responsible for setting prices.
"There is public consensus about raising prices, with no opposition coming from
the finance ministry and other government agencies on this point," the
policymaker said.
He declined to say when prices may go up, but since there is not much time left
in the first half, adjustments may take place in June.
Related to Kim's comments, KEPCO executives told lawmakers that electricity
prices need to be raised 4.5 percent in the first half and 9 percent between July
and December. Both KEPCO and KOGAS reported trillions of won in losses as they
were barred from raising prices to reflect market conditions.
The state-run companies warned that failure to raise prices will result in
taxpayers having to cover losses down the road.
The vice minister, meanwhile, said inbound foreign direct investment (FDI) in the
first half of 2009 may be on par with levels reached last year.
He said that while FDI had dropped 40 percent on-year in the first quarter, a
rebound in April should make up for earlier losses.
yonngong@yna.co.kr
(END)

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