South Korea delays decision on energy price hikes for Q2

SEOUL (Reuters) – South Korea will announce higher electricity and natural gas prices for the second quarter in the next few days, the energy ministry said on Friday, after the government failed to reach an agreement with parliament on the new rates.

The government was supposed to set the new prices on Friday but, in a statement, the ministry said the decision would come after further discussion, adding that the government and parliament agreed on a need for price increases and the top priority to minimise people’s economic burdens.

It cited people’s living conditions, global energy prices, possible impacts on inflation and the local bond market, and the financial standing of public enterprises as factors to be considered for the decision.

In the first quarter, South Korea raised electricity prices by 9.5%, which was the biggest hike in four decades, to reflect a surge in global energy prices. Gas prices were kept steady.

It was met by public backlash, however, leading to President Yoon Suk Yeol’s comment last month that major public utility fares needed to be frozen at least during the first half of this year amid the already increased burden from higher inflation.

(Reporting by Jihoon Lee; Editing by Christian Schmollinger)