Minister urges public firms to restrain price increases

Public companies providing exclusive services should be cautious when making price hike decisions and consider possible effects such action could have on inflation and the overall economy, South Korea’s top economic policymaker said Friday.

“Public companies, unlike private ones, usually provide exclusive services. They have to make decisions (on prices) by taking into consideration their ripple effect on the whole economy,” Finance Minister Bahk Jae-wan told an anti-inflation meeting.

He admitted that there is demand for price adjustment in some sectors, but noted that there is also a pressing need to address moral hazards, such as shady supply deals in the public sector, apparently placing more emphasis on improving management, rather than pursuing immediate price hikes.

His remarks came as some corporations have called for hiking up service charges that they claim have failed to go up with rising production costs. Such developments have led to ballooning losses.

The government has been urging public companies to withhold their decisions on price hikes of their major services for fear that they could drive up the inflationary pressure.

Earlier this week, the Korea Electric Power Corp., the country’s sole electricity service provider, decided to ask for the government to raise electricity prices by an average of 10.7 percent. 

(Yonhap News)