Energy bill would raise homes’ natural gas cost
2004-11-29
    November 26, 2004
    Prices of liquefied natural gas, or LNG, will rise starting in January if a revision to a key energy bill is passed, increasing the financial burden on 10.2 million households that use LNG for cooking and heating.
    The Ministry of Commerce, Industry and Energy said yesterday that it made public a notice of a revision to the Enhancement of the Petroleum Business Act on Wednesday, which includes an increase of its fee, which acts as a quasi-tax, on LNG imports. The fee would be 21,210 won ($20) per ton from the current 9,750 won. The consumer price of LNG is likely to jump 1.9 percent, or 9.25 won, to 502.72 won per cubic meter.
    "There is no reason to maintain a low-price policy as the consumption of LNG has passed the market entry phase and entered the mature market phase," said a ministry official.
    But environmental organizations and gas companies are against the fee increase, insisting that consumption of LNG, a fuel that generates relatively little pollution, would drop.
    The ministry withdrew its plan to increase the quasi-tax on oil imports to 33,934 won per ton in August 2003 after strong opposition by industry and environmental organizations. If the ministry passes its revision this time, it would be the first raise in quasi-taxes since March 1997.
    The ministry also said the revised bill includes levying quasi-taxes on oil imports for power generating plants beginning January. The government has exempted or returned the quasi-tax so far, meaning that electricity charges are likely to rise if the bill passes.
    The government expects to accumulate about 320 billion won a year, if the bill passes. It is expected to be submitted to the National Assembly by the end of the year.
    "To cope with high international oil prices, the government should secure stable financial resources for the sector," said a ministry official.
 
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