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Busan Metropolitan City Freezes 2025 Retail Gas Supply Cost to Ease Citizens’ Burden

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Busan Metropolitan City (Mayor Park Heong-joon) announced that, despite factors that would normally drive an increase in the retail gas supply cost, it has decided to freeze the 2025 retail supply cost in order to ease citizens’ burden.
This measure is intended to relieve the financial pressure on citizens struggling with the recent record-breaking heat wave, rising food prices, and economic downturn.

The city gas rate is determined by adding the wholesale cost, which accounts for approximately 85 to 90 percent of the total, and the retail supply cost, which accounts for 15 to 10 percent. The wholesale rate is approved by the Minister of Trade, Industry and Energy, while the retail supply cost applied to households and industries is approved by the respective city or provincial governor.

<City Gas Rate Structure> Wholesale Cost (85–90%) + Retail Supply Cost (15–10%) = Final Consumer Rate - Adjusted/approved by the Ministry of Trade, Industry and Energy - Includes raw material cost + supply cost from Korea Gas Corporation - Adjusted/approved by City/Province - Includes Busan City Gas supply cost

In preparation for determining the retail supply cost, the City commissioned an external professional agency from May through July. The study identified upward factors such as reduced sales volume leading to declining profitability, rising base wages, and increased supply pipeline installation costs. Nevertheless, after discussions with Busan City Gas Co., Ltd., the City decided to freeze the cost.

This freeze will reduce household gas bills by an average of approximately 393 KRW per month. For industrial users, the benefit is even greater, as the wholesale rate, which constitutes 85–90 percent of the gas bill, has been declining since late last year. For example, in August 2025, a business site with average consumption (1,791,000 MJ) saw its monthly bill reach approximately 6.43 million KRW, a 16.4 percent decrease compared to December 2024.

Busan City Gas Co., Ltd. plans to cope with the upward factors on its own by cutting costs and securing large-scale demand, in line with the City’s decision to freeze rates.

Meanwhile, Busan Metropolitan City will continue investing to expand city gas supply. For this, it has secured 10.2 billion KRW in mandatory investment resources for gas companies, an increase of 1.1 billion KRW compared to last year, to expand gas supply to hillside areas with steep slopes and distant regions.

Park Dong-seok, Director General of the Advanced Industry Bureau, stated, “We hope that freezing the retail gas supply cost will help stabilize prices and ease citizens’ living expenses, even if only slightly. Going forward, we will make every effort to encourage cost reductions and operate gas rates in a reasonable and stable manner so that citizens can truly feel the benefits.”