"I'm embarrassed about the rates"... Next month's gas price bomb, is there any solution?

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With the whole country frozen solid, many people are embarrassed and angry about the huge heating cost burden.

KOGAS is in a position that the deficit has increased to 9 trillion won and an additional rate increase is inevitable. Why is the deficit so serious and there is no answer other than a sudden rate increase?

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A sundaeguk restaurant in Gangseo-gu, Seoul.

I always have to use gas to boil and cook soup, but I feel uncomfortable every time I turn on the light.

The gas fee, which was around 220,000 won in December last year, has risen by more than 70% to 380,000 won in a year.

[Hong Jeong-ran/Sundae-guk restaurant owner: I was surprised when it was over 300,000 won.

I've never had anything like this.

But after that, it was more than 300,000 won.]

Self-employed food vendors were hit hard.

[Kong Kyung-ho/President of the side dish store: It should be seen that it has risen almost twice.

If we blindly raise income (expenses) just because gas prices rise, business people like us will be hit hard.]

Since the demand for heating has increased significantly due to the recent cold weather, the burden of heating costs that will be announced next month is expected to increase.

The reason for the skyrocketing heating cost is the deficit of the gas corporation.

Gas rates were frozen for 20 months from July 2020 to April of last year, taking into account prices.

KOGAS has already recorded a deficit of 1.8 trillion won in receivables at the end of 2021, to put it simply, and the fact that international LNG prices more than doubled last year as the Ukraine-Russia war broke out acted as a bad factor.

Despite hastily raising gas rates by 5.47 won per 1MJ (megajoule) four times last year, or about 38%, receivables increased to about 9 trillion won as of the end of last year.

KOGAS claims that an additional rate hike is necessary to normalize business in the future.

Funds are needed to purchase LNG right away and operate related facilities, but if the deficit is severe, contracts with more unfavorable terms when issuing loans or bonds are required.

The government plans to raise gas rates additionally in the second quarter, and KOGAS is demanding an increase of at least 10 won per 1MJ (megajoule) this year.

(Video coverage: Park Hyeon-cheol, Video editing: Choi Hye-young)

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[Reporter Jung Joon-ho: As electricity rates have already risen recently and additional hikes in subway, bus, and taxi fares have been announced, public utility rates are literally reduced.

As a result, it is said that since it is a public company, it can endure a little loss.

Experts say that it is urgent to address the gas corporation's deficit.

As much as raw materials are purchased from the international market, there is a part where the cost can be reduced by increasing the creditworthiness of KOGAS, and it is never a good sign to continue to accumulate deficits like turning a bomb.]

[Reporter Jung Joon-ho: Currently, LNG prices have fallen by less than half compared to last year's peak when the war was in full swing.

It is said that the cost of purchasing raw materials will decrease in the future, but of course, since long-term contracts are made, it is difficult to reflect raw material prices directly.

However, since it is a problem directly related to the economy of the working class, there are opinions that the speed of rate hikes should be adjusted from the second half of this year while looking at the supply and demand conditions of raw materials.]

[Reporter Jung Joon-ho: There is an energy voucher that supports the energy cost of the vulnerable.

I am gradually increasing the amount, but in winter, the average per household is about 152,000 won.

This amount is not enough for a month's heating bill for a household of 4 in the case of these days.

Gas Corporation also raised the rate discount range for the vulnerable from this month, but at most they receive about 10,000 won more per month.

Resistance to rate hikes can be reduced only when effective support measures are in place for the vulnerable.]

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