Seoul to expand ‘differentiated rate system’ for public services

Korea will expand the “differentiated rate system” for public services as part of its ongoing efforts to tame inflation, a senior Finance Ministry official said Friday.

The differentiated rate system will be applied to such services as electricity and highway toll fees by offering diverse rates based on time, amount of usage and other factors, Vice Finance Minister Yim Jong-yong said at a weekly anti-inflation meeting.

The system is intended to allow consumers to adjust their public service use as a way to reduce financial burdens. They can, for example, select an optimal time that guarantees discounts.

The move comes as the government is mulling raising key public service fees in the second half of this year. Efforts are being made to minimize the impact of the upcoming hikes on already high inflation.

Korea’s consumer prices jumped 4.1 percent in May from a year earlier, increasing by over 4 percent for the fifth straight month. The increase is much higher than the government’s annual target of keeping inflation at around 3 percent.

“The government will come up with market-friendly and creative policy alternatives through this anti-inflation meeting and reflect them in our second-half economy management plan,” Yim said at the meeting.

In addition, Yim said the finance ministry and the central Bank of Korea will hold a monthly meeting to exchange views on the overall economic conditions and inflation situations.

Both sides agreed to hold the gathering when Finance Minster Bahk Jae-wan visited the BOK on Wednesday to have talks with BOK Gov. Kim Choong-soo. During the talks, both agreed to beef up close policy coordination as economic uncertainty lingers. 

(Yonhap News)