S.Korea set to hike power prices in 2H '08 -report
SEOUL, June 26 (Reuters) - South Korea is likely to hike electricity fares in the latter half of the year, a local news agency quoted Seoul's energy minister as saying on Thursday.
"Inflation was too high in the first half of the year, but there are moves to adjust power and electricity costs in the second half," the Yonhap News Agency quoted Lee Youn-ho, the Minister of Knowledge Economy, as saying.
"Businesses should plan their budgets for next year with consideration that their electricity costs will be higher," Lee added.
His comments came after the government said earlier this month that state-run energy firms including Korea Electric Power Corp (KEPCO) (015760.KS) need to refrain from raising tariffs to help consumers and businesses to cope with surging energy costs.
Shares of KEPCO, the country's biggest electricity producer, rose 2.62 percent, outperforming the wider market's 0.79 percent gain, trading at 31,400 won as of 0244 GMT.
South Korea has kept electricity rates unchanged since a 2.1 percent increase in early 2007, as inflation accelerated to a seven-year high in May.
Last month, KEPCO said fuel costs would rise 2 trillion won ($1.93 billion) this year from 2007 due to higher oil and coal prices. The utility reported an operating loss of 219 billion won in the first quarter this year due to soaring raw material costs.
South Korea is the 10th-largest energy consumer, and the fifth-largest crude oil importer in the world. (Reporting by Angela Moon; Editing by Jonathan Hopfner)
