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Korea expands energy bill relief as inflation pressures persist

Published: 01 Jan. 2026, 14:41

A driver refuels a car at a gas station in Seoul on Dec. 31, 2025. [YONHAP]

Korea’s consumer inflation slowed to 2.1 percent last year, near the central bank’s 2 percent target, official data showed on Wednesday. Rising food and energy prices driven by a weak won continued to strain household budgets.

Consumer prices in December rose 2.3 percent from a year earlier, as higher petroleum prices linked to currency weakness fed through to costs, the Ministry of Data and Statistics said.

Annual inflation eased sharply from recent highs, after rising 5.1 percent in 2022 and 3.6 percent in 2023, before slowing to 2.3 percent in 2024 and 2.1 percent last year.

By category, price growth for agricultural, livestock and fisheries products slowed to 2.4 percent last year from 5.9 percent in 2024. Agricultural prices were unchanged last year after jumping 10.4 percent in 2024 due to poor harvests, reflecting base effects. Livestock prices rose 4.8 percent and fisheries products climbed 5.9 percent.

Prices of key food staples recorded sharp increases, including pork, rice, mackerel and imported beef, adding to pressure on household spending.

A customer selects mackerel at a supermarket in Seoul on Dec. 31, 2025. [NEWS1]

Prices for industrial products, including processed food and petroleum products, rose 1.9 percent last year, up from 1.5 percent in 2024. Processed food prices increased 3.6 percent, led by coffee, which jumped 11.4 percent, and bread, which rose 5.8 percent.

Petroleum prices rose 2.4 percent after falling in both 2023 and 2024, marking the first annual increase in three years.

“International oil prices fell, but higher exchange rates due to the weaker won and a reduction in fuel tax cuts pushed up gasoline and diesel prices," said Lee Doo-won, a senior official at the Data Ministry.

In December, inflation stayed in the 2 percent range for a fourth consecutive month. Petroleum prices jumped 6.1 percent from a year earlier, their fastest rise since February last year, while prices for agricultural, livestock and fisheries products rose 4.1 percent.

Staple food prices rose sharply in December, with rice up 18.2 percent, apples rising 19.6 percent and imported beef climbing 8 percent.

If the won remains excessively weak this year, inflationary pressures are likely to persist.

“With living costs still rising in the high 2 percent range, we will continue to closely monitor conditions, including the impact of the exchange rate on prices," said Kim Woong, deputy governor of the Bank of Korea, at a meeting to review inflation conditions on Wednesday.

Bags of rice are stacked at a supermarket in Seoul on Dec. 31, 2025. [NEWS1]

The government announced support measures for vulnerable groups at an economic ministers’ meeting chaired by Finance Minister Koo Yun-cheol.

Energy bill discounts for people with disabilities and basic livelihood recipients will be expanded through March, with monthly electricity bill reductions of up to 16,000 won ($11) and city gas discounts of up to 148,000 won.

About 200,000 households receiving energy vouchers and using kerosene or liquefied petroleum gas will receive an additional average payment of 147,000 won, raising total support to as much as 514,000 won per household. Low-income households using briquette boilers will receive coal purchase vouchers worth 472,000 won per household.

The government will also significantly expand its 1,000-won breakfast program. Annual coverage for university students will rise to 5.4 million from 4.5 million, while the number of industrial complex workers eligible will jump to 900,000 from 50,000.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY NAM SOO-HYOUN, AHN HYO-SEONG [[email protected]]