SEOUL Feb 20 South Korea will increase domestic
rates of gas by 4.4 percent on average from Friday, to reflect
higher costs of natural gas and recoup part of the hefty losses
of state-run Korea Gas Corp (KOGAS), the economy
ministry said on Wednesday.
The hike, the first since last June, is projected to raise
average annual consumer inflation by 0.08 percentage point, as
city gas accounts for 1.96 percent of the consumer price index,
a ministry official said.
Asia's fourth-largest economy, which depends on imports of
oil and gas, has struggled to curb inflation led by costlier
energy prices, and stopped KOGAS from raising gas prices since
last June, when it hiked the rate by 4.9 percent on average.
"The past price freeze contributed to an increase in Korea
Gas's payments receivable and debt ratio as its prices failed to
reflect the costs of importing natural gas," the ministry said
in a statement.
The amount KOGAS booked as payments receivable, or losses
caused by lower pricing than cost, snowballed to 5.5 trillion
won ($5.08 billion) by the end of 2012, up from 4.4 trillion a
year ago, according to the statement.
Its debt-to-equity ratio also rose to 397 percent last year
from 348 percent in 2011, the ministry added.
KOGAS, the world's largest corporate buyer of liquefied
natural gas, has a 95 percent share of South Korea's wholesale
($1=1082.1500 Korean won)
(Reporting by Meeyoung Cho; Editing by Clarence Fernandez)