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The government is in a tighter bind over raising the long-stalled rates of gas and electricity, stymied by high inflation, the plunging Korean currency against the U.S. dollar and geopolitical conflicts pushing up global commodity prices, market watchers said Tuesday.

Warranting a hike in energy rates are the snowballing debts of and, by extension, higher interest payments due for the country's two state-run energy firms.

Korea Electric Power Corp. (KEPCO) and Korea Gas Corp. (KOGAS) had a combined debt of 250 trillion won ($184 billion) as of last year, incurring 6 trillion won in annual interest.

However, the country's price and energy authorities are unable to broach the issue, fully aware of the sustained high prices of goods and services weighing heavily on the livelihoods of the public.

Experts say higher energy rates are inevitable, however incremental, as low near-term retail costs at the expense of the deteriorating financial soundness of state-run entities will compromise the country's fiscal health in the long term.

"It's only a matter of time," said Park Jong-bae, professor of electrical and electronics engineering at Konkuk University.

KOGAS has been supplying gas at a lower price despite soaring global liquefied natural gas (LNG) prices — hence the 13 trillion won debt accumulated in the form of unpaid bills. Korea relies on imports to meet 100 percent of its LNG needs.

Heating in the winter came at a cheaper price, buffered largely by the government policy put in place to navigate emergencies. Also kept low were electricity rates, compared to the average among OECD member nations.

But whether the status quo should be maintained is questionable, in his view.

"The government will have to raise the rates in small increments. Maybe not now, but eventually. Measures to assist low-income groups need to be outlined."

However, the government is not likely to push for rate hikes in the near term, as indicated by the country's top economic policymaker.

Deputy Prime Minister and Finance Minister Choi Sang-mok told reporters in Washington, April 18, that the country is grappling with unfavorable price conditions.

"We remain conservative about raising utility rates, given the varying impact of changes in utility rates on overall prices and the finances of state-run entities in the broader context of wild fluctuations in global energy prices," he said.

Gas rates have been left unchanged for one year since May last year when the price was increased 1.04 won per megajoule.

Electricity rates have jumped 44.1 percent since 2022. This brightens the prospect of KEPCO's operating profit soaring to 10 trillion won this year, snapping the three previous years of operating deficits to the tune of tens of trillions of won.