The nation’s 14 leading business associations, including the Korea Chamber of Commerce and Industry and the Korean Iron and Steel Industry Association, issued a joint statement on Thursday against a sudden increase of industrial electricity prices, and sent it to key governmental agencies and the presidential transition committee.
In the statement, they said the recent hike of the industrial electricity price by the Ministry of Knowledge Economy is stringent and the measure could hamper competitiveness of the nation’s corporate sector, already hampered by slowdowns in exports and domestic consumption.
The ministry announced on Wednesday it would raise industrial electricity prices by 4.4 percent, and 2.0 percent for households starting Jan. 14.
“A recent survey of 300 companies found that the upper limit for a rise in the industrial electricity price (without major repercussions) is 3.3 percent,’’ said an official from the KCCI, a nationwide business lobbying group.
“In particular, the excessive electricity price hike deals a blow to the nation’s backbone industries, including steel, heavy industries and semiconductors, which will lead to a rise in production costs for those industries and, ultimately, in end-user product prices.”
According to the KCCI, the steel industry would be most affected by the government’s move, with electricity said to account for about 25 percent of total steel production costs (excluding the cost for raw materials), it added.
The ministry also mentioned in the announcement a possible hike in consumer prices. It projected the latest power price hike will raise the average annual consumer inflation rate by 0.04 percentage points.
“The government increased the price for industrial electricity four times to 20.1 percent over the past year and a half, saying the price of industrial electricity in Korea is cheaper than in other countries and thus Korean companies have wasted electricity,’’ the statement said.
“But it is not true. Korean companies’ production sites stand in the world’s top class in terms of energy efficiency.
“The government has to take a gradual approach in raising the price of industrial electricity considering its serious economic impact, and offer equal treatment to household electricity users,’’ the statement said.
By Seo Jee-yeon (
jyseo@heraldcorp.com)
