South Korea hikes power prices by 5.3%

South Korea is increasing electricity prices by 5.3 percent, a decision that has been delayed for over a month given the potential impact on the country’s high inflation, the Energy Minister Lee Chang-yang said on Monday.

The hike, which was supposed to go into effect on April but got postponed in response to public pushback, comes to reflect rising generation costs and represent drastic increase in power prices by 9.5 percent at the beginning of the year.

The ministry is increasing the prices of city gas for households as well by 5.3 percent, and both price hikes will be going into effect on Tuesday.

The South Korean government has been under pressure from both utilities suffering from significant losses and households feeling the effects of increased living expenses.

“I am heavy-hearted about the burden and concern coming from the price increases,” said Lee Chang-yang, when he announced the decision.

State owned electric power corporation, Korea Electric Power Corp (KEPCO)’s operating loss reached $4.69 for the first quarter, according to an official data.

Inflation in South Korea has been receding since hitting a near 24-year high of 6.3 percent in July, but it is still close to the central bank’s objective of two percent, at roughly four percent.