Japan approves energy firms' household power price hike

Chugoku Electric Power Co

16/05/2023 10:23

TOKYO, May 16 (Reuters) - Japan's government on Tuesday
has approved an increase in household electricity rates of made
by seven major utilities after delays in examining their
requests as the government sought to address record high
inflation.
    The hikes, ranging from 14% to 42% to reflect higher fuel
costs, will add pressures on the world's third-biggest economy.
    Japan's core consumer inflation likely re-accelerated in
April, a Reuters poll of 19 economists showed, as a flurry of
retail price hikes offset the effect of the government's energy
subsidies.
    Against the backdrop of soaring fuel prices last year
following Russia's invasion of Ukraine, seven utilities,
including Tokyo Electric Power (TEPCO)  9501.T , have requested
the hikes in electricity rates from April and June to offset
high input costs.
    But the government has taken several months to examine their
requests to ease the high inflation burden on consumers.
    On Tuesday, a group of ministers met to discuss price issues
and approved the increases, which take effect on June 1 at the
earliest, and which will be reflected in the July bill. 
    The utilities initially applied for a price increase of
28-48%, but the industry ministry ordered a recalculation of
costs based on the latest fuel prices and demanded a reduction
in fixed costs to curb the rate of increase to 14-42%.
    "We have conducted extremely rigorous assessments,"
Yasutoshi Nishimura, the industry minister, told a news
conference.
    Hokkaido Electric Power  9509.T 's increase is 21%, Tohoku
Electric Power's  9506.T  is 24%, the increase is 14% from
TEPCO, 42% is Hokuriku Electric Power  9505.T , 29% by Chugoku
Electric Power  9504.T , 25% by Shikoku Electric Power  9507.T ,
and 38% by Okinawa Electric Power  9511.T , according to the
ministry.
    Delaying the hikes and reducing the rates are expected to
squeeze the loss-making sector between high global fuel prices
and Tokyo's green goals.

 (Reporting by Yuka Obayashi, Editing by Louise Heavens)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))