Soaring Gas Price, Blizzard Forces Korea to Lift Energy Vouchers

 

South Korean officials said on Thursday the government plans to double energy vouchers and cut gas prices for underprivileged families because heating bills have soared amid a prolonged cold wave.

The Korean Peninsula, northern China and Japan have been hit by extreme frigid conditions with blizzards and strong winds, which some countries have said are the coldest in decades.

North Korea’s central radio broadcaster said on Wednesday that temperatures in the country’s north could dip below -30C, while freezing weather in Afghanistan has claimed more than 120 lives over the past two weeks, a report by The Guardian said.

Countries all over the world have faced rising energy costs because the conflict in Ukraine has caused prices of natural gas and heating fuel to shoot up.

South Korean households began to feel the impact in recent weeks after turning up the heat amid a cold spell, with monthly gas bills up 34% last month from a year ago, according to Statistics Korea.

Choi Sang-mok, South Korea’s top presidential economic secretary, said the increase in bills was inevitable, citing a near tenfold growth in global natural gas prices since 2021, but South Korean rates were still far lower than the levels in many other advanced countries.

ALSO SEE: Yoon Warns Seoul May Need to Get Nuclear Weapons Back – NYT

 

 

Heavy snow, flights cancelled

The measures would benefit almost 1.2 million families receiving energy vouchers and around 1.6 million homes eligible for the gas discount this winter, in a country of 21.6 million households, Choi said.

“There is an inevitable aspect of realising energy prices under these difficult external circumstances,” he told a briefing. “But we will make maximum policy efforts to minimise the burden on the people.”

Many South Koreans expressed concerns over additional hikes in energy bills as freezing winter weather continued.

“Our heating bills have gone up about 50% from previous years,” said a Seoul resident who said he and his wife have fixed incomes and have had to cut back on expenses like eating out.

The weather agency issued a heavy snow advisory on Thursday in the greater Seoul area and some eastern and central regions, prompting at least five flights to be called off and several national parks to shut down as of 11am (0200 GMT), according to the interior ministry.

The warning came just days after nearly 500 flights to and from the tourist island of Jeju were cancelled due to harsh weather, disrupting the Lunar New Year holiday for many.

 

DBS chops growth projection

Meanwhile, worse-than-expected GDP data for the fourth quarter of 2022 has led some analysts to sharply lower their forecasts for 2023.

In a note on Thursday, DBS said tech exports are unlikely to turn around soon, given the typical cycle of de-stocking and the US restrictions on chip sales to China.

The benefits of China reopening its tourism sectors should be limited for South Korea and Taiwan, it said, given the deterioration in Seoul and Taipei’s bilateral ties with Beijing.

“We are downgrading South Korea and Taiwan’s 2023 GDP growth forecasts to 1.5% and 1.6%, respectively, Ma Tieying, a senior economist with DBS Group Research, said.

“We maintain the forecasts for the two central banks to end tightening in 2Q, while seeing a rising probability of Taiwan’s rate pause in March.”

 

• Reuters with additional editing and reporting by Jim Pollard

 

NOTE: Further details (DBS remarks) were added to this report on January 26, 2023.

 

ALSO SEE:

 

Shares of India’s Adani Group Plunge After Scathing US Report

 

South Korea to Meet Striking Truckers as Supply Chains Suffer

 

China Keen to Speed up Free-Trade Talks With South Korea: Xi