Adjustment factors arise due to the surge in international oil prices… ‘Notice’ ahead of the election
Inevitable increase in electricity rates in the future… ‘Reservation right’ is getting stuck again
[세종=뉴스핌] Reporter Eun-Seok Lim = KEPCO held an increase in electricity rates by freezing the fuel cost adjustment unit price, which will be reflected in electricity rates in the second quarter, to -3 won despite the surge in international oil prices.
The reason is that it is a measure to stabilize people’s lives through the management of utility bills as consumer prices have risen due to the impact of’Coronavirus Infectious Disease-19 (Corona 19)’. In addition, it seems that the policy authorities felt burdened by the increase in electricity rates ahead of the by-election of the mayors of Seoul and Busan.
According to the calculation details of fuel cost adjustment unit price for April-June 2021 announced by KEPCO on the 22nd, the fuel cost adjustment unit price for the second quarter is applied at -3 won per ㎾h. Although it was inevitable to raise the fuel cost adjustment unit price due to the surge in international oil prices, KEPCO applied the same fuel cost adjustment unit price as in the first quarter.
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| Korea Electric Power Corporation office building [사진=한국전력] 2020.08.04 [email protected] |
◆ Adjustment factors arise due to the surge in international oil prices… Ahead of the election,’watch your eyes’
KEPCO explained that the fuel cost adjustment unit price adjustment factor occurred due to the influence of the rise in international oil prices through the calculation details of the fuel cost adjustment unit price.
However, a notice from the government was issued to reserve to immediately reflect the temporary surge in the price of liquefied natural gas (LNG) caused by the strange wave last winter.
In particular, it is necessary to keep the adjusted unit price in the second quarter the same as in the first quarter (-3 won/kWh) by utilizing the unadjusted amount incurred when determining the adjusted unit price in the first quarter in order to promote the stability of people’s lives, which are suffering from the prolonged corona 19 He said he was notified.
On the surface, the fuel cost adjustment unit price was frozen due to the inflation effect of Corona 19, but some interpreted that it was a decision made by the party government, which was ahead of the April reboth election, reflecting public opinion.
It is said that raising electricity rates in Seoul and Busan, where the current by-elections are being held, is not well aware of the ruling party, and it is inevitably a burden to policymakers.
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| crude oil [사진=로이터 뉴스핌] |
◆ Future electricity rate hike is inevitable… Will it hold back again with the’reservation right’?
As international oil prices are on a steep rise in tandem with the global economic recovery, it is generally expected that an increase in electricity rates will be inevitable in the future.
When the economy recovers, inflation is likely to continue, and some point out that if the government uses the’reservation right’ every time as an excuse for stabilizing people’s lives, the system itself will become useless.
The reservation right is to consult with the Ministry of Strategy and Finance and other inflationary authorities when KEPCO asks the government to reflect changes in fuel cost adjustment fees, whether to reflect it as it is, whether to partially reflect it, or not at all. It is reflected in the electricity bill calculation standard (notice).
In particular, there is a view that it will not be easy to raise fuel costs by reflecting them in electricity rates as soon as possible ahead of the next presidential election.
In fact, it is doubtful whether the fuel non-linkage system will operate as the fuel cost fluctuations in the previous three months have been properly reflected, such as reflecting the temporary surge in LNG prices this time, and reflecting the unadjusted amount of fuel cost adjustments in the first quarter.