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LNG prices to further rise on surging global prices

(Yonhap)
(Yonhap)

Prices of liquefied natural gas (LNG) in South Korea will increase more than 8 percent in May amid rising global energy prices, the industry ministry said Friday.

LNG rates for households and commercial users will go up between 8.4 percent to 9.4 percent starting May 1, leading to the users' extra payment of around 2,450 won ($1.93) per month on average, according to the Ministry of Trade, Industry and Energy.

The government has frozen LNG prices for households and general purpose since July 2020 in a bid to help stabilize consumer prices, which caused unpaid bills to swell to nearly 1.8 trillion won as of end-December.

Accordingly, the government announced its decision to raise the rate three times this year -- in May, July and October.

The latest move is expected to add burden on local households and commercial users.

The planned hike comes just a month after the government adjusted the unit fuel cost to reflect a recent surge in global energy prices which ultimately led to the rate increase by an average of 1.8 percent.

South Korea relies entirely on imports for its LNG needs.

In April, the government also raised the electricity rate 6.9 won per kWh given the hike in prices linked to climate change and other costs.

"With unpaid bills rising, the decision is inevitable as international natural gas prices have been soaring since the second half of last year," a ministry official said.

The import price of natural gas for South Korea stood at $1,013.35 per ton as of March, up 20.08 percent from the previous month. The comparable figure for March 2021 was $438.42, according to government data. (Yonhap)

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