Koreans Now Pay the Price for Last Gov't's Populist Policies

      January 26, 2023 12:57

      Households across the nation have been jolted by a surge in heating costs during this winter's record cold spells. Global prices of liquefied natural gas, which accounts for a majority of heating fuel in Korea, surged 128 percent last year, forcing utility companies here to raise prices by 38 percent.
      The Ministry of Trade, Industry and Energy froze gas prices in the first quarter of this year, but further hikes seem unavoidable later. Surging energy costs are the product of the Moon Jae-in administration's populism. The former administration slashed household gas prices by 11.2 percent in July 2020 and kept them unchanged for nearly two years until April 2022, just after the presidential election. As a result, state-run KOGAS suffered an W8.8 trillion operating loss last year (US$1=W1,232). KEPCO also postponed raising electricity prices during the Moon administration, which was afraid of being criticized for its harebrained nuclear phaseout policy, resulting in a W30 trillion loss in 2022. KEPCO is expected to suffer an W18 trillion loss this year.
      The main opposition Minjoo Party, which should take responsibility for these populist debacles, is busy blaming the incumbent president. It even wants to open the government coffers again to shower the public with W150,000 to W450,000 in cash per person.
      The U.K. boosted electricity prices by 89 percent from 2021 to June of last year, and fees also rose in Japan (36 percent), France (26 percent) and the U.S. (22 percent) to reflect rising global energy prices. In Korea, they increased only 4.6 percent. As a result, power consumption has not decreased here, resulting in double-digit growth in energy imports despite soaring global prices. The Minjoo Party, which has a majority in the National Assembly, must at long last shelve its populist policies, and the government must reflect soaring global energy prices in utility fees. Energy vouchers could then help low-income households weather the storm.

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