Rising prices
The price increase will provide KEPCO with an additional profit of 7 trillion won in 2023, according to Lee. The government aims to use more low-cost energy such as nuclear, following increasing the share of more expensive and volatile sources such as liquefied natural gas over the past five years, exacerbating Kipco’s losses.
Li said further price increases for the second quarter would be considered following examining the local economy and financial condition of state-run companies as well as global energy prices. The government will also consider raising gas prices following keeping prices the same in the first three months during peak heating demand in winter.
The increase in energy prices comes as households in South Korea grapple with rising costs of living, such as food and public transportation. Countries around the world are facing higher energy prices following Russia’s war on Ukraine.
Inflation levels are expected to remain high, before slowing next year as stable oil prices and higher interest rates slow economies at home and abroad, Bank of Korea Governor Ri Chang-yong said last week. The price hike at KIPCO in the first quarter will have an impact of 0.15 percentage point on inflation levels next year, Pang Keesun, senior vice minister of finance, said at the briefing on Friday.
Kipco shares fell 1.4% in 2022, falling for the seventh year in a row.
