Abolition of City Gas Seasonal Rate System after 14 Years…Unification of Industrial and General Use Rates

Starting from the 1st of next month, city gas rates for industrial and general use will be unified into a single rate regardless of the season.

The seasonal differential rate system, introduced in 2010 to reduce gas consumption in winter, has continuously faced criticism for its effectiveness and fairness.

Korea Gas Corporation expects that with this reform, the general rate will be adjusted to 1.3784 won per MJ and the industrial rate to 1.2034 won, without increasing the burden on users.

In particular, for industrial use, the price difference between winter and summer rates exceeded twice, causing significant burden on the industry.

The seasonal differential rate system was initially introduced to resolve the imbalance in natural gas supply and demand due to the surge in heating demand. However, it was deemed unreasonable for industrial use due to the relatively small seasonal demand variation.

Additionally, the fairness issue was raised since the seasonal differential rate system did not apply to residential use.

As a result, the Ministry of Trade, Industry and Energy abolished the seasonal differential rate system for power generation in 2021, and now extends this abolition to industrial and general use, effectively ending the seasonal differential rate system.

However, the seasonal rate system will be maintained for heating and cooling systems due to their specific nature.

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