South Korea's state power firm Korea Electric Power Corp. (KEPCO) said Monday it will freeze the country's electricity rates in the first quarter of 2022 amid rising inflation.

KEPCO said it has decided to set the adjusted unit fuel cost at zero won per kilowatt-hour for the January-March period of next year, the same as that three months earlier.

Late last year, KEPCO adopted a flexible electricity rate system linked to global fuel prices in a move to improve its profitability. It previously charged an electricity rate under a fixed-rate electricity billing system.

Under the new system, the billing system of electricity is adjusted every three months, depending on global prices of liquefied natural gas (LNG), coal and crude oil.

KEPCO said the freeze comes though its fuel costs have risen sharply due to soaring coal, LNG and oil costs.The state power company thus proposed a 3 won increase in the adjusted unit fuel cost, but the government rejected it amid growing inflation in Asia's fourth-largest economy.

South Korea's consumer prices rose 3.7 percent in November from a year ago, the fastest on-year gain in a decade and accelerating from a 3.2 percent increase in October.

KEPCO said it will hold discussions with the government on its plans to reflect rising fuel costs in its electricity rates down the road. (Yonhap)