The stock prices of Korea Electric Power Corporation and Korea Gas Corporation plunged on 10th. This appears to be due to concerns that the new government may freeze or reduce electricity and gas rates.
Korea Electric Power Corporation shares traded at 27,400 won on 10th at 3:14 p.m. The stock fell by 10.31% (3,150 won) compared to the previous day. At the same time, Korea Gas Corporation's stock also declined by 9.4% (3,850 won) to 37,650 won.
According to the industry, Korea Electric Power Corporation will announce the fuel cost adjustment price for electricity rates for the third quarter (July to September) around the end of this month. Gas rates are also expected to be adjusted this month as they are typically discussed in even months and adjusted in odd months.
The issue is that it is rare for public rates to be increased in the early days of a new government. President Lee Jae-myung also noted during the presidential campaign, "(Electricity rates) may feel expensive now, but there’s no choice. They have to be increased in the future," while adding, "Right now, the domestic economic situation is very bad, and people’s livelihoods are difficult, so it’s hard to adjust electricity rates immediately."
In particular, the possibility of lowering electricity rates has been raised as international oil prices have fallen. International oil prices, which were around $70 per barrel in the first quarter, have now dropped to $60.
The financial situations of Korea Electric Power Corporation and Korea Gas Corporation remain challenging. Korea Electric Power Corporation has recorded profits for seven consecutive quarters, but the cumulative deficit since 2021 exceeds 30 trillion won. Korea Gas Corporation also has about 14 trillion won in unpaid dues for residential city gas.