[Letters] Time to quit the low-price policies

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[Letters] Time to quit the low-price policies

Half-price tuition is the ongoing social issue in Korea. Since the college tuition level in Korea is generally higher than it is in other countries, there is room to lower it through improvement of the financial structure of colleges and universities. However, if the tuition is adjusted solely through government financial assistance, it would be transferring the burden from the families of college students to other households, and the burden on the taxpayers will remain the same.

The electricity and gas prices share the same problem as the half-price tuition. In the past few years, the price of oil has been soaring, but the increased price is not reflected in the gas and electricity price. The Korea Gas Corporation has about 4 trillion won ($3.6 billion) of uncollected bills as of the end of 2010, and the Korea Electric Power Corporation has struggled with deficits for three years in a row.

In order to mitigate the pressure on consumer price following the sudden rise of oil and agricultural products, the government employed a policy to control the public utility prices strictly. However, it does not make sense to keep the energy price below the cost price since the energy sources are imported entirely.

The aggravating financial structures of the Korea Gas Corporation and the Korea Electric Power Corporation due to the low price pose challenges to the government financing at a broader level. In 2008, the petroleum price reached $150 per barrel, and the government provided additional 1 trillion won in assistance to the public corporations in charge of energy through the supplementary budget.

Rather than having those who spend more energy to pay more, a portion of the burden is handed over to the rest of the citizens, regardless of the amount of power usage, and then on to the next generation in order to keep the energy price so low.

It is only natural that people seek efficient ways when the energy is expensive and use liberally if price is low.

Jeong Han-gyeong, a senior researcher at the Korea Energy Economics Institute.
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