Posted March. 30, 2015 07:13,
Public utility charges such as water supply and sewage fees, bus and subway fares are on the rise. Prices of products that are closely related to daily life such as insurance and gasoline are also expected to increase, imposing economic burden on the average working Koreans.
Local autonomy governments, such Uijeongbu in Gyeonggi Province, Andong in North Gyeongsang Province, Jeonju in North Jeolla Province and Jeju, announced on Sunday that they are planning to raise water supply and sewage fees. Starting from May, the Andong city government will increase prices for water supply and sewage by 10 percent and 34.6 percent, respectively. So will Jeonju city with its sewage charges by 36 percent. Jeju and Uijeongbu have decided to lift up the water supply and sewage charges in May and June, respectively. Other local governments are known to looking into price raise as well.
The move by the local governments is related to the innovation measures for local governments finance, which was announced by the central government in January. In an effort to reduce the debt level of local state-owned companies, the government recommended that local governments raise the water supply price up to 90 percent of their production cost from the current 83 percent and sewage price by 70 percent of the cost from the present 36 percent. On top of this, as general price has been falling down to the point where there are concerns over the possibility of deflation (a decrease in general price level in time of economic recession), it is analyzed that local governments and public agencies who have not increased public utility charges over the past few years are pushing forward with the price hike.
The increase of public transportation fares is under discussion as well. The Seoul city government is known to be looking into the increase of subway and bus fares by 200-550 Korean won (approx. 0.18-0.5 U.S. dollars). The price hike in Seoul city is likely to be followed by other cities as public transportation fares in the metropolitan area is interconnected among Seoul, Gyeonggi Province and Incheon.
On top of all these, gasoline prices, which dropped to the range of 1,300 won (approx. 1.8 dollars) at one point, are now going up again, and life insurance companies are expected to increase the price for term insurance such as cancer insurance from May, all of which would make average working class people feel the pinch of high prices.