Gov’t won’t raise utility rates yet

The government said yesterday that it will delay raising public utility and service charges and rein in prices of food products until inflationary pressure comes under control.

The decision, made at a meeting of economic policy makers, comes as Seoul stressed the need to keep close tabs on inflation despite signs that consumer prices may be coming under control.

The country’s consumer prices grew 2.6 percent on-year in March, down from 4 percent for the whole of 2011. Last year’s numbers hit the upper ceiling of the Bank of Korea’s 2 to 4 percent target band and raised concerns that inflation could hurt the country’s economy.

Senior officials said international commodity prices, costs of farm products and service charges remained a source of concern. International crude prices reached $123 per barrel last month, causing the costs of local refined petroleum products to rise 6 percent on-year.

Prices for farm products rose 9.4 percent compared to the year before, with public transportation, electricity and service charges all going up in March.

Seoul already gives tariff quotas to products such as wheat, corn and sugar so they can be imported more cheaply.

“Every effort will be made to not raise public charges,” the finance ministry said. It said if marking up prices cannot be avoided, the government will limit the adjustments.

The government, meanwhile, said it will permit so-called parallel imports of some manufactured goods to further tame consumer prices. Such a move can weaken monopoly import contracts on products such as clothing that have been pushing up prices. The government plans to make it easier for such products to come through customs. Yonhap