S. Korea to hike electricity prices by 4.9 pct next month

SEOUL, July 26 (Yonhap) -- South Korea will raise electricity prices by 4.9 percent starting next month as part of its efforts to reflect rising power production costs, the commerce ministry said Tuesday.
Electricity bills for household consumption will grow 2 percent from August, while those for commercial and industrial use will increase 4.1 percent and 6.1 percent, respectively, according to the Ministry of Knowledge Economy. For farmers, electricity charges will remain unchanged.
The ministry said that the price hike is an "inevitable" decision to reflect rising energy production costs due to high raw material prices. But the move comes amid concerns that price hikes for public services could drive up the nation's already high inflation.
"The rate increase is inevitable at a time when only 86.1 percent of production costs are reflected in power prices," a ministry official said. "The government still tried hard to ease its impact on ordinary people."
Demand for electricity price hikes has been growing as rising crude oil costs are weighing on energy producers here, causing their losses to balloon, but the government has delayed price hikes as it struggles with stubbornly high consumer prices.
The ministry said that it tried hard to restrict price hikes for household consumption to the minimum in a bid to ease the financial burden on low and mid-income people. Instead, it raised the charges relatively high for industrial and commercial use.
kokobj@yna.co.kr
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