As KEPCO abruptly postponed the announcement of the second quarter fuel cost adjustment unit price, which was scheduled to be released on the 21st, attention is focused on the background.
KEPCO announced on its website on the 20th, “After receiving notification from the Ministry of Trade, Industry and Energy that the 2Q fuel cost adjustment unit price calculation details and related ministries are in progress, KEPCO will temporarily postpone the announcement.” informed,” he said.
It is rumored that KEPCO’s abrupt delay in the announcement of fuel cost adjustments was attributed to President-elect Yoon Seok-yeol’s promise to freeze electricity rates in April and abolish electricity rate hikes.
As raw material procurement costs increase due to the rise in international energy prices such as oil prices, KEPCO’s electricity rate hike, which is expected to lose close to 20 trillion won, has been expected. KEPCO is said to have tried to submit a proposal to the Ministry of Industry to raise the adjusted unit price of raw materials by 3 won.
Electricity rate consists of basic rate, electricity rate (standard fuel cost), fuel cost adjustment rate, climate environment rate, etc. KEPCO announces fuel cost adjustment unit price every quarter according to the fuel cost index system that has been implemented since last year. If KEPCO raises the fuel cost adjustment unit price, electricity rates will also naturally increase.
Even if the fuel cost adjustment unit price is not raised, the government has already decided to raise the standard fuel cost by 4.9 won per kWh twice in April and October for a total of 9.8 won, and the climate environment fee is also raised by 2 won from April to 7.3 won. From April, electricity rates will increase by 6.9 won.
If the fuel cost adjustment unit price is also raised, the rate of electricity rate increase will increase even more, going against the policy of the new government. For KEPCO, it can only be burdensome.
However, the problem is that KEPCO’s situation, which recorded an operating loss of 5,860.1 billion won last year, is not so favorable. As international oil prices soared due to the Ukraine crisis, the deficit this year is expected to be larger than last year, putting KEPCO into a dilemma.