ENERGY PRICE TO BLAME FOR INFLATION RATE

[Anchor Lead]

Consumer prices have increased 5.2% last month, an increase of 0.2% points from the previous month. This is attributable to soaring energy prices which increased nearly 30% compared to a year ago. The problem is, when looking at energy prices, the worst is yet to come.

[Pkg]

The only income of this man in his 60s is a 620,000-won monthly basic livelihood subsidy. To save on gas fees, he uses an electric heating pad and washes his dishes with cold water, but last month his gas bill surpassed 60,000 won. That's more than ten times the amount compared to a year ago.

[Soundbite] Sohn Seung-ho(Recipient of basic livelihood security) : "I only turn on my boiler for 30 minutes to one hour when temperatures outside fall to subzero levels. I just keep my room warm enough not to freeze."

Public bath houses, which use gas around the clock, now pay nearly seven million won in monthly gas fees. Although they do have more customers these days, as COVID-19 restrictions have been lifted, their gas bills are now more than four times the amount they paid last year.

[Soundbite] Park Su-jeong(Sauna owner) : "To be honest, I am worried that too many customers will visit my place because of the rising gas fees. Sauna owners are thinking of closing their business altogether."

A poll shows that 99 percent of small business owners find the surging heating fees burdensome, and more than 8 percent are considering either suspending or closing down their businesses. The owner of this internet cafe accommodating 200 customers had to lay off its staff and raise prices because of the soaring electricity bill.

[Soundbite] Jeon Jae-young(Internet Cafe owner) : "There is only so much I can do to save on costs. I wish they could lower electricity prices for small businesses."

The problem is that electricity and gas prices are highly likely to rise further, while the international prices of LPG, also used widely by working-class people, have surged more than 30 percent. The higher price of LPG is to be reflected in domestic prices next month. Taxi drivers are especially worried about the impending hike.

[Soundbite] Cho Young-chul(Taxi driver) : "I have fewer customers because of the higher taxi fare, but it’s even harder due to the rising gas prices."

Counter to authorities' expectations that inflation will subside in the second half of the year, prices perceived by consumers will likely go up, because energy prices impact service prices as well.