The Korea Electric Power Corporation(KEPCO) has decided to raise electricity fee by the most permissible level under the current pricing system to reflect a rapid increase in fuel prices and help reduce the state electricity distributor’s mounting deficit. 

KEPCO said on Monday that the price of electricity for households from the third quarter will increase by five won per kilowatt hour. 

It is the maximum raise permitted for a yearly period due to fuel price changes. As a result, there will be no hike in electricity fee in the fourth quarter. Electricity bills were frozen in the two preceding quarters. 

With the raise, an average household comprising four people is expected to see its monthly electricity bill rise by one-thousand-535 won from July. 

The move came after KEPCO posted a record high deficit of over seven-point-seven trillion won in the first quarter. The state company initially sought permission to raise fees by 33-point-six won per kilowatt hour from July, but readjusted the plan after the government proposed a moderate raise. 

The raise, along with a scheduled gas price hike, is feared to worsen the country’s inflation. The Korea Gas Corporation plans to raise the retail gas fee by one-point-11 won per megajoule from July, equivalent of a monthly rise of two-thousand-220 won for four-member households on average.