The government and the ruling People Power Party (PPP) will hold a consultative meeting this week to decide on a hike in electricity and gas rates for the second quarter, officials said Sunday.

The meeting will be held Monday to decide on the extent of an increase in electricity rates, which has been postponed for more than a month, according to officials from the ruling party.

The government and the ruling party “tentatively” decided to raise the electricity rates by 8 won (US$0.01) per kilowatt hour, higher than the expected 7 won increase, a PPP official told Yonhap News Agency.

The meeting comes as the state-run Korea Electric Power Corp. (KEPCO) announced self-rescue measures worth 25.7 trillion won last week, including asset sales and a freeze in wages, in a bid to improve its financial soundness amid snowballing losses caused by soaring energy costs.

The government raised electricity rates for the first quarter by 13.1 won per kilowatt hour, the sharpest hike in about four decades, in a move to help KEPCO narrow its losses.

But late in March, the government and the PPP decided to put off the planned announcement of the electricity rates for the second quarter, citing the need for more time to review “related circumstances.”

Last year, the government was not able to raise the energy rates enough to cover soaring costs amid high inflation, and growing public burdens over the COVID-19 pandemic and an economic slowdown.

KEPCO logged a record operating loss of 32.63 trillion won in 2022, more than quadruple from a year earlier. Its first-quarter net losses narrowed from a year earlier due to the government’s electricity rate hikes and milder increases in global energy prices.

The government and the PPP are also likely to decide Monday to raise the gas rates for the second quarter, with a hike of 1-2 won per megajoule highly expected.

The gas rates were frozen in the first quarter amid public outcry over spikes in heating and energy bills last winter.

Last year, the government jacked up the gas rate for households more than 40 percent on-year, or 5.47 won per megajoule.

The Korea Gas Corp. (KOGAS) said last week it will freeze the wages of senior officials and seek cost-cutting measures worth 15.4 trillion won over the next five years to improve its financial health. KOGAS had around 11.6 trillion won in uncollected payments as of the end of March.

Source: Yonhap News Agency