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Price Increases Expected Next Year

Posted December. 26, 2007 04:14,   


Consumer prices and utility charges are expected to soar due to rising oil and crop prices starting early next year.

The Ministry of Finance and Economy (MOFE), local organizations and public companies said on December 25 that the Korea Highway Corporation asked the government for approval to increase highway tolls by 5 percent.

Seoul Metropolitan City will revise a provision to increase sewage charges by 20.5 percent in the second half of next year, and by 20.5 percent in 2009 and 2010 respectively. Gyeonggi Province is expected to raise high school tuition by 2.8 to 3.0 percent next year. Incheon City decided to increase sewage charges by 23.3 to 25.3 percent from January 2008.

Nongshim, the largest instant noodle maker in Korea, is said to be considering how much it will increase prices by and when the hike will come due to skyrocketing flour prices. Earlier, CJ, another food maker in Korea, raised the price of its foods made of flour by 24 to 34 percent.

Lotte Confectionery agreed to increase cookie prices 15 to 20 percent from February 2008. Haitai Confectionery & Foods is also expected to hike confectionary prices in March, when new products are put to the market in earnest.

Petrochemical products such as gasoline, diesel and lamp oils are expected to continue their upward swing.

The Korean Oil Corporation predicted, “Dubai oil from the Middle East will stand at 77.5 dollars per barrel, a 13 percent increase from 2007. The possibility of reaching the $100 mark per barrel is high.”

In the meantime, consumer prices went up 3.0 percent in October and 3.5 percent in November from the same period last year, reaching the upper limit of the Bank of Korea’s (BOK) 2.5 percent to 3.5 percent. And the 3 percent increase level is expected to continue.