The price of natural gas will be raised an average 5.8 percent from Jan. 1 to reflect a recent hike in import prices, the government said Tuesday.
The price of liquefied natural gas supplied by the Korea Gas Corp. (KOGAS) will be raised by 6.1 percent for the industrial sector, according to the Ministry of Trade, Industry and Energy.
"The rate hike comes as the country urgently needs to secure enough supply to meet growing demands for gas from the suspension of (three) nuclear reactors, which in turn prompted an increase in spot purchases of gas, causing a rise in average purchase prices," the ministry said in a press release.
For households, the price of gas used for both cooking and heating will be hiked by 5.7 percent, which translates into about additional 4,300 won (US$4.09) per month for each household, according to Lee Ki-hyeon, an official from KOGAS.
The price of gas used by nonmanufacturing businesses, including office buildings, will be raised between 5.5 percent and 5.8 percent.
The ministry said the rate hike was inevitable as the recent rise in purchase prices was expected to add significantly to KOGAS' already soaring debts, which peaked at 5.5 trillion won at the end of 2012 before dropping to 5.1 trillion won recently.
It said the state-run gas company had originally needed to raise its rates by an average 8.4 percent when considering the 600 billion won in outstanding fees.
The government, however, "minimized the rate hike by reflecting only the increase in purchase prices and not KOGAS' outstanding fees," it added. (Yonhap News)