South Korea cuts natural gas rates by 6% on lower LNG import costs

South Korea will cut retail natural gas prices for households and industry by an average of 5.6% from May 1 to reflect reduced LNG import costs, the Ministry of Trade, Industry and Energy said Thursday.

It marks the third cut this year after rates fell 9% in January and 9.5% in March. South Korea cut city gas rates by more than 20% last year — 10.3% in May, 10% reduction in March, and 5.9% in January.

“City gas rates have dropped by more than 38% since the end of 2014,” the ministry said in a statement.

Despite the price cuts, the country’s LNG demand has been declining. LNG sales by state-owned Korea Gas Corp., which has a monopoly on domestic natural gas sales, fell 4.4% year on year to 3.14 million mt in March.

For the first three months, Kogas’ LNG sales are estimated at 10.79 million mt, up 1% from 10.68 million mt a year earlier as its sales over January-February increased 3.4% year on year on a cold snap.

Kogas sold a total of 31.46 million mt of LNG last year, down 10.6% from 35.17 million mt in 2014, which marks the second consecutive year of decline.