The Ministry of Trade, Industry and Energy has cut the price of gas by an average of 10.1 percent from March 1, the ministry said on March 2.
The reduction was possible due to the recent slide in the price of crude oil, which also brought down the import price of LNG, which was reflected in the price of gas supplied throughout the country in conjunction with the government’s Cost Link System. The system allows an increase or decrease in the import price of LNG of up to3 percent to the supply price of LNG throughout the country.
The by 5.9 percent cut in “municipal gas” supply prices was the second largest cut since 2002’s 12.9 percent cut in January.
The ministry said the reduction in the price of crude oil from the 3rd quarter of last year led to the cuts in the import price of LNG during November and December, which was reflected in the cuts in the domestic supply price of municipal gas.
The total amount of reduction came to 2,0576 won/MJ to bring the price to 18,4130 won/MJ so that the city gas charges will be competitive against similar petroleum fuel prices such as bunker-C fuel to reduce the costs for individuals and business firms using the environmentally friendly fuel. It also brought the consumer price down by 0.18 percent and the production base price by 0.23 percent, contributing to the stabilization of the inflation rate in the country.
As a result of the reduction in the city gas charges, 1,601 households that use the gas will save some 75,000 won per household next year. Total gas charges per household this year will be down to 601,000 won from 676,000 won in 2014, the ministry said.
The ministry and the Korea Gas Corp. will keep watching the movement of the price of oil and if it falls further, they will reflect that change into gas charges as fast as possible to lessen the burden of energy expenses on the general public as best they can.
The ministry and Korea Gas Corp. will also discount the gas charges to the residents of special disaster areas and other people who are entitled to the government’s welfare measures.
The government disaster relief measures include a provision of support to those in disaster zones, including the discount of 12,400 won per month in gas charges for those whose houses were totally damaged, and a discount of 6,200 won in gas charges for the households that were partially damaged or were flooded.
KOGAS, an abbreviation for Korea Gas Corporation, was incorporated by the Korean government in 1983. Since its founding, KOGAS has grown to become the world's largest LNG importer. As the nation's sole LNG provider, the corporation is fully committed to providing clean, safe and convenient energy to the people of Korea. In keeping with this mission, KOGAS currently operates three LNG terminals and a nationwide pipeline network spanning over 3,562km in order to ensure stable supply for the nation.
KOGAS imports LNG from around the world and supplies it to power generation plants, gas-utility companies and city gas companies throughout the country. it produces and supplies natural gas, purifies and sells gas-related by-products, builds and operates production facilities and distribution network, and explores, imports and exports natural gas for domestic and overseas markets.
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