Industry ministry denies gas tariff burden shifted onto manufacturers

The industry ministry on Tuesday rejected a newspaper report that the government has shifted the full burden of higher LNG prices onto manufacturers, saying industrial and household gas tariffs are set under separate systems and that residential shortfalls are not recovered through industrial rates.

The response followed a Maeil Business Newspaper article published Monday under a headline saying gas prices had jumped 66 percent and that "the bill was sent only to companies." The article reported that industrial gas tariffs had risen about 66 percent from a year earlier because of higher international LNG prices, while household tariffs were frozen.

Industrial gas tariffs are adjusted monthly under a raw-material cost pass-through system that tracks the price of imported LNG and exchange rates, the ministry said, reflecting the higher cost of imported LNG rather than any policy of transferring residential costs to industry.

Household tariffs, by contrast, have been kept unchanged in consideration of living costs and broader price conditions. The unrecovered cost of that hold is accumulated as receivables at Korea Gas Corp. and is to be recovered later through household tariffs. Those amounts are not reflected in industrial rates.

The ministry's statement was issued as an explanation of the Nov. 9 article rather than as a change in policy.