[Actually] “The Moon government didn’t raise rates…” I checked the facts

As the super cold wave and the gas price increase overlapped, the 'heating cost bomb' became a reality.

The ruling and opposition parties are fighting for responsibility.

The ruling party said that the Moon Jae-in government had in fact 'turned the bomb', and the opposition party was busy blaming the government for insufficient measures.

"Although LNG prices skyrocketed in the aftermath of the Russia-Ukraine war, the Moon Jae-in administration did not raise residential gas rates. On the other hand, the US raised residential gas rates by 218%, the UK by 318%, and Germany by 292%."

- People’s Power Ho-Young Joo, Representative of the Emergency Response Committee on the 26th,

-Park Hong-geun, floor leader of the Minjoo Party of Korea, held the Supreme Council meeting on the 27th

So, the argument of the people's power is that, unlike other countries, the Moon Jae-in government neglected it and did not respond properly, even though there were factors that continued to increase gas rates, and the Democratic Party is blaming the Moon Jae-in government whenever it has a chance.

The People's Power and the Democratic Party continue to pour out similar comments.

If so, did other countries really raise gas rates a lot?

We checked the correlation between gas prices and changes in house gas prices, mainly in the US and European countries.

The SBS Fact Check team analyzed the facts.

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Home gas rates, how much have they increased in other countries?

After securing data on international natural gas fluctuation trends and housing gas rates in major countries, the SBS In fact team compared the two data by matching the period.

For international natural gas prices, JKM, the standard price index for spot import of liquefied natural gas (LNG) in Korea, and for residential gas prices in major countries, after securing data analyzed by Korea Gas Corporation, Statista, a global statistical analysis company, In parallel, the work of matching with the data of

The table below shows the analysis results.

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Natural gas international prices rose steeply in the second half of 2021.

It was a time of heightened international tensions with signs of war in Ukraine. 

At that time, gas rates in Korea were constant at 16.16 won per 1 MJ.

This is because the Moon Jae-in administration has suppressed raising rates for the reason of burdening the common people with Corona 19.

On the other hand, it can be seen that European countries have been quick to raise household rates as international gas prices skyrocketed.

In particular, in the case of Germany, from 26.57 won to 1 MJ in October 2021 to 46.33 won next month, it has been analyzed that it has risen more than 74% in just one month.

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And at the end of February of the following year, the war in Ukraine began, and world gas prices soared around that time.

Gas prices in major countries continue to rise.

However, even then, our gas prices remained the same. 

Since then, international gas prices have slowed their upward trend, but surged again in the second half of last year and peaked in August.

It was about three months after the launch of the Yoon Seok-yeol government.

The government could not stand this trend and raised gas rates, and eventually the people this winter received a 'heating cost bomb' bill.

Looking at the data alone, the people's claim that "unlike other countries, the Moon Jae-in government did not raise rates" can be seen as 'mostly true'. 

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However, in the power of the people and in the major media, Germany is often compared to the case of Germany to emphasize that our rate hike is slow, but Germany's dependence on Russian natural gas is 49% based on Statista data, much higher than the EU average of 38%. .

Compared to other countries, it is bound to be greatly affected by the war in Ukraine.

Looking at the graph above, the change in gas prices in Germany is even more dramatic.

For reference, the United States is the world's largest natural gas producer, and South Korea's dependence on Russian natural gas is around 6%.

Of course, Germany is bound to be much more sensitive to the war in Ukraine, but the impact on the world is bound to be as great as the war affects the world's gas supply.

Why is rate hike so slow in Korea: ① Two elections

I think we need to take a closer look at the overall context.

This is part of why the gas rate hike was so slow.

In fact, concerns about international gas prices have already begun to be reflected in the second half of 2021, when there were signs of a war in Ukraine.

If so, what were our politicians doing?

At that time, the attention of the political world was on the presidential election in March of the following year.

Around the time of the election, no politicians were talking about the need to raise gas rates.

That would be the case, because saying so would not benefit the election.

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In fact, when the team checked the energy-related pledges in the pledges of then-presidential candidates Seok-yeol Yoon and Jae-myeong Lee of the Democratic Party, who emerged during the gas crisis, candidate Seok-yeol Yoon focused on “denuclearization” and candidate Jae-myung Lee focused on “resolving blind spots in energy welfare.” was doing

I couldn't find anything about how to adjust energy prices.

We will abolish the nuclear power plant policy and promote carbon neutrality by harmonizing renewable energy and nuclear energy.

- Yoon Seok-yeol Page 269 of the People's Power Presidential Candidate Pledge at the time We

- Lee Jae-myung, then Democratic presidential candidate, 377-page pledge

Right after the presidential election, around the time the political burden eased, the Moon Jae-in administration raised rates twice in a row in April and May.

At the time, the Presidential Transition Committee announced the '110 National Tasks of the Yoon Seok-yeol Administration' and started to prepare countermeasures against rising energy prices, but it was only a principled order to 'minimize the domestic ripple effect'.

Stabilize the macro economy and strengthen internal and external risk management

ㅇ (Price stabilization) Minimize domestic ripple effects of external factors such as energy and raw material price hikes through strengthening stockpiling functions and supply and demand stabilization

measures

And in June, the newly inaugurated government of Seok-yeol Yoon reiterated its policy of freezing gas prices.

As you know, there were local elections in June.

And after the election, the government raises prices quite high, 6.8% and 15.5% for July and September, respectively.

In other words, when gas prices were soaring around the time of the war in Ukraine, no politicians were arguing for higher rates.

It should have been all the same.

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Of course, we are not the only ones affected by the election.

France last year was similar.

France held a presidential election in April last year and a general election in June.

In March of last year, President Emmanuel Macron, who challenged for re-election, campaigned to tie up gas rates amid soaring international gas prices.

French President Emmanuel Macron said the government-imposed petrol price regulation should be extended beyond June, if possible, to the end of the year in order to respond to price spikes related to the war in Ukraine. We have to go by the end of the year,” he said at the campaign site.

French President Emmanuel Macron on Monday said state-imposed curbs on gas prices should be extended beyond June, preferably until the end of the year, to respond to price surges linked to the war in Ukraine.

“And with regards to gas in particular, we will go beyond June, we need to go until the end of the year”, Macron said at a campaign event.

- Reuters, March 8, 2022.

And, after all the elections in the second half of last year, France dramatically raised gas prices.

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French President Emmanuel Macron

Why is rate hike so slow in Korea: ② Government pricing structure

There is one more thing to consider.

Unlike the US or Europe, we have very strong government gas price controls.

The largest shareholder of KOGAS is the Ministry of Strategy and Finance.

The core structure of the government's gas price control is to 'suspend' the 'shock' of price hikes.

Korea Gas Corporation has something called 'receivables'.

Operating loss resulting from pricing gas sales below the cost of imports.

Accounts receivable accumulates when international gas prices rise because you sell them at a lower price, but you can recover them when gas prices fall.

This is why our gas rates are much more stable, unlike European countries that limit prices to the extent of a 'price cap'.

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The problem is that there is no suitable countermeasure other than a rate increase in this unprecedented gas price surge.

This is because the gas price market can operate well in cycles of rising and falling, but when external variables increase, such as the war in Ukraine, unpaid debts continue to accumulate.

We use 100% imported natural gas.

Of course, it is clear that energy including gas is a public good in Korea, and the stable price structure through accounts receivable is advantageous to the common people.

However, since the elasticity of rates to international gas prices is not great, the public's immunity to gas rate volatility is inevitably weak, and the shock of rate hikes is even greater.

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I am well aware that Yangbiron is irresponsible.

However, in fact, looking at the various data, statistics, and data the team found, it clearly shows that the ruling and opposition parties share responsibility.

The unprecedented skyrocketing of international gas prices, the Moon Jae-in government's failure to predict, two elections at a critical time, the ruling and opposition parties that shut their mouths on the issue of rate hikes, and the government and the ruling party evading political responsibility by blaming the former government, no one will be free from responsibility. You can not.

Rather, the team believes that clarifying the share of responsibility for these issues goes against the purpose of fact-check journalism.

The government and the ruling party, which took the lead in policy making, and the opposition party, which took the majority of parliamentary power, do not seem to be to blame for others.

The SBS fact check fact team fact-checked the people's power claim that "other countries raised gas rates due to soaring international gas prices, but the Moon Jae-in government did not."

As a result of analyzing the correlation between international gas price trends and housing gas rates in major countries, the fact team judges the people's power claim as 'mostly true'.

However, the team's conclusion is that in order to examine why our gas rate hike has been so slow, it is necessary to comprehensively consider the political situation of the election along with the data, and furthermore, our gas rate setting structure.

This is because the 'gas bomb' controversy is the result of several contexts intertwined rather than simply being responsible for one person.