[Alpha Biz= Reporter Kim Jisun] Choi Yeon-hye, the president of Korea Gas Corporation (KOGAS), emphasized the urgent need to increase gas rates due to unpaid receivables amounting to 13.5 trillion KRW to ensure the stable supply of natural gas during the winter.

During a luncheon press conference hosted by the Ministry of Trade, Industry, and Energy on the 22nd, President Choi stated, "We are utilizing all possible measures to prevent an extreme situation, but self-help efforts alone are insufficient. The current scale of receivables is such that even if all employees worked without pay for 30 years, it would still be uncollectible."

Unpaid receivables refer to the amounts not yet recovered through gas fees from the cost of imported natural gas. These receivables essentially represent high-interest debt that will eventually need to be paid by the public. While on paper, these receivables are listed as assets, making the company's books appear profitable, the reality is that KOGAS is effectively operating at a loss.

KOGAS, responsible for importing liquefied natural gas (LNG), relies heavily on external borrowing to invest in natural gas supply infrastructure, intending to recover these costs over time through gas rates. However, the current gas rate cost recovery rate is about 80%, meaning that the more gas sold, the greater the financial loss incurred.

The international energy crisis triggered by the Russia-Ukraine war led to a 200% increase in global LNG prices since 2022, while domestic gas rates only rose by about 43%.

President Choi noted that the massive receivables have forced KOGAS to expand its borrowing, severely undermining its financial stability. KOGAS's debt increased from 26 trillion KRW at the end of 2021 to 39 trillion KRW by the end of 2023, with its debt-to-equity ratio rising from 379% to 483% during the same period.

 

 

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