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South Korea to Raise Electricity Prices in Q1 2023 by Record Amount

South Korea has announced that it will raise electricity prices for the first quarter of 2023 by a record amount of 13.1 won per kilowatt-hour.

Power Poles
Power Poles

This marks the largest-ever quarterly increase, and the growth rate will average 9.5%. The decision to increase prices was made in light of the fact that the Korea Electric Power Corp (KEPCO) is expected to post a deficit of over 30 trillion won ($23.73 billion) this year, following a 6 trillion won deficit last year. These deficits were attributed to rising global energy prices that were not reflected in domestic prices on time.

Second Quarter Electricity Price Increase to be Decided After Review

Minister Lee Chang-yang stated that the increase for the second quarter and beyond would be determined after reviewing trends in global energy prices, domestic inflation conditions, and the financial standings of public enterprises. The government has also decided to hold gas prices steady for the first quarter before reviewing an increase in the second quarter and after that.

Price Increases Aimed at Sustaining Energy Supplies and Normalizing KEPCO and KGC Management

Minister Lee explained that the adjustments in electricity and gas prices are necessary for the sustainability of energy supplies and the normalization of the management of KEPCO and the Korea Gas Corporation. These price increases will help address the deficits incurred due to rising global energy prices and ensure the long-term stability of energy supplies in South Korea.