Seoul: The state-run Korea Electric Power Corp. (KEPCO) announced it will freeze the adjusted fuel cost for the fourth quarter, indicating that South Korea's electricity rates are expected to remain unchanged for the last three months of this year. KEPCO will maintain the adjusted unit fuel cost, a crucial component of the nation's electricity rates, at the maximum threshold of 5 won (US$0.004) per kilowatt-hour (kWh) for the October-December period, a rate it has held since the third quarter of 2022.

According to Yonhap News Agency, the fuel cost adjustment unit price is determined quarterly, based on energy prices such as coal and liquefied natural gas (LNG) from the preceding three months, within a range of plus or minus 5 won per kWh. Despite a recent decline in fuel prices, which initially suggested a reduction to -12.1 won per kWh, the government instructed KEPCO to maintain the cost unchanged to focus on improving its financial health.

"We were notified by the government to maintain the current rate of 5 won per kWh in the fourth quarter considering KEPCO's financial situation and the significant amount of unadjusted fuel cost charges in the past," the company stated, emphasizing its commitment to continue efforts to normalize management. To alleviate financial strain, KEPCO increased electricity rates for industrial use by 9.7 percent in October 2024, while keeping rates for households and small stores stable.

Despite Monday's decision, there is potential for an electricity rate hike due to other factors, such as the electricity consumption charge. Last month, President Lee Jae Myung highlighted that electricity rates are likely to increase as part of the government's initiative to promote renewable energy usage to curb carbon emissions, as reported by the presidential office.