Prices of city gas and power are scheduled to increase in October. The upcoming hike in city gas prices, which were already increased in May and July, will be higher than previous increase.
After its increase in April, power prices will go up higher in October as well. Lower income families, already suffering from higher necessities and food prices, must bear the brunt of higher public service prices. Hopes for inflation to peak in September and October and gradually stabilize are at risk of being slashed.
To make matters worse, public health care prices are slated to rise next year. The Ministry of Public Health and Welfare has decided to raise public health care service prices, which are paid out by the employer and individuals, to cover growing losses. Also, the Seoul Metropolitan Government is considering raising the basic meter fare by 800 won, currently at 3,800 won, to address the shortage of taxis in late hours and increasing late night fares up to 40 percent.
The government and politicians are responsible for the increase in public utility prices at a time when the burden of inflation is highest ever. The side effects of failing to timely adjust public service prices out of political fear are impacting the livelihoods of the people, coupled with the Ukraine war and the U.S. fiscal austerity measures. What is even more serious is that the agony is being concentrated on the lower income bracket, which is already at its limits.
The price of global LNG prices in the first half of the year doubling against the price of the previous year, causing losses of more than 5 trillion won to the Korean Gas Corporation. The annual losses of KEPCO, which increased portion of LNG generated power, is nearing 30 trillion won. The strengthening of the dollar, which has grown to its highest since the global financial crisis, is also impacting higher public service prices. Eventually, it will be difficult for the government to turn a blind eye to snowballing losses at public utility services.
Nevertheless, the additional burden of higher utility prices weighs down on lower income families, particularly those suffering through COVID-19 and inflation. The family of a mother and two daughters in Suwon made a tragic decision to take away their own lives when they couldn't afford to pay their public health care fare of 270,000 won for the last 16 months. If price hike is inevitable, the government should come up with measures to minimize the troubles of lower income brackets, such as distributing energy vouchers. It is particularly essential to build seamless and powerful policies for the elderly living alone, disabled families and others who remain sidelined.