Increases in Public Utility Charges in the First Half of Next Year

It is expected that there will be increases in the prices of cigarette, electricity, taxi, and water supply and drainage beginning in the first half of next year, followed by price increases in postal service and inner-city buses in some regions in November.

It appears that the increase in public utility charges will be a large burden for common people, who are badly off due to the economic recession.

According to the Ministry of Finance and Economy and local governments on December 5, in the case of inner-city buses, a decision on a price increase has been made in Busan, Daegu, Gwangju, Incheon, Daejeon, Gyeongki Province, North Jeolla Province, and Cheju, and the other local governments, including North Kyeongsang, South Gyeongnam, Gangwon, North Chungcheong, South Chungcheong, and South Jeolla are expected to increase bus fares starting from the beginning of next year.

The Federation of Nationwide Bus Transportation Business Associations said that “North Gyeongsang Province is supposed to decide on an increase in bus fares after holding a council on consumer policies on December 14, and the local governments that have not increased bus fares yet will plan to increase them in the first half of next year.”

The Association of Taxi Transportation in five cities including Seoul is negotiating with the local governments by saying that they should increase bus fares during the first half of next year in order to improve management difficulties due to freezing bus fares since September 2001.

Prior to this, postal service fares have been risen 30 won respectively according to weight from November 1. For instance, mail weighing up to five grams rose from 160 won to 190 won.

In addition, the Korea Power Engineering Company Inc. appears to be increasing electricity charges beginning in the first half of next year, considering the burden of cost due to increases in oil prices.

It is expected that cigarette prices will be also increased as the Health and Welfare Committee of the National Assembly passed a revised bill of the law on People’s Health Improvement consisting of a 500-won increase in health improvement funds, which will be imposed on cigarette prices on December 1.

The Cultural Heritage Administration plans to increase admission fees to old palaces, including an increase in admission fees of Gyeongbok Palace for adults from 1,000 won to 5,000 won, and is consulting with Ministry of Finance and Economy.

Seoul City has also decided to increase charges for water supply and drainage services in April 2005, and the other local governments plan to increase charges for water supply, drainage, and trash services.

Kim Bong-ik, director of the price policy department of the Ministry of Finance and Economy, said that “the consumer price index was rather stable last month, but consecutive increases in public utility charges will heavily affect prices starting from this month throughout next year. We will negotiate with the local governments in order to minimize the price increase gap.”

Chi-Young Shin higgledy@donga.com