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No more utility rate hikes until year-end

First Vice Finance Minister Lee Eog-weon speaks during a meeting at the Hall of Banks in Seoul on Sept. 23, 2021, to discuss policies on macroeconomic and financial affairs. (Yonhap)
First Vice Finance Minister Lee Eog-weon speaks during a meeting at the Hall of Banks in Seoul on Sept. 23, 2021, to discuss policies on macroeconomic and financial affairs. (Yonhap)
The government said Wednesday that it would try to freeze utility fees until the end of this year in an effort to stabilize prices amid rising costs for raw materials such as oil.

The Finance Ministry said there had been no talk of raising railroad and road fees, which include train fares, highway tolls, intercity and express bus fares, and wholesale regional water supply costs.

“While rates of local utilities such as gas, water and sewage, transport and garbage bags are to be determined by local governments, the Ministry of Interior and Safety will closely consult with the local administrations to try not to raise prices in the fourth quarter if possible,” First Vice Minister of Economy and Finance Lee Eog-weon said after a vice ministerial meeting on prices that he presided over.

Local transport costs such as city bus, metro and taxi fares are therefore likely to be kept unchanged this year.

The government’s announcement on Wednesday appears to have put the brakes on plans to discuss city gas rate hikes.

The Ministry of Trade, Industry and Energy and the Korea Gas Corporation had said city gas rates needed to be raised from November due to recent changes in international prices of oil and liquefied natural gas.

About rising milk prices, Lee said the government would closely communicate with the dairy industry to spread out the timing of price hikes as much as possible, and would try to keep the price hikes from affecting the cost of processed foods such as cheese and bread.

Lee also said the government would unveil ways to improve the crude oil price determination structure within this year, and would set up an egg wholesale market this year to enhance transparency in setting egg prices.

The government plans to increase budget gas stations around six metropolises including Seoul and Sejong, which have few such gas stations.

South Korea’s consumer prices have risen more than 2 percent each month for five months in a row since April on rising agricultural and livestock product prices and international oil prices.

The government earlier expected prices to stabilize in the second half of this year compared with the second quarter, but prices continue to rise. The annual inflation rate is forecast to go well over the government target of 1.8 percent.

By Kim So-hyun (sophie@heraldcorp.com)
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