By Ryu Jin
Staff Reporter
Korea Electric Power Corp. (KEPCO) went on emergency alert as the state-run power company faces the threat of its first-ever loss this year due to skyrocketing crude oil prices, according to company officials Friday.
In an emergency meeting with regional chiefs, KEPCO Chairman and CEO Lee Won-gul described the current situation as a ``crisis’’ and discussed measures to overcome the challenge.
Company officials expect fuel costs to increase by more than 1 trillion won (roughly $1.04 billion) this year due to soaring prices of oil and soft coal and unfavorable exchange rates.
Dubai crude, a benchmark for Asian refiners which accounts for most of South Korea’s oil imports, has recently exceeded the cost of $90 per barrel. Soft coal prices have also doubled compared to one year ago.
``We are in a desperate situation,’’ a company spokesman said. ``We think we could experience our first-ever deficit.’’
As part of efforts to address the unfavorable business environment, the company decided to reduce its budget by 760 billion won in two stages, according to other company officials.
``We have also decided to create new business items abroad to overcome this situation,’’ said one of the officials.
KEPCO, which earned about 200 billion won from overseas projects last year, plans to raise its overseas sales to 500 billion won. It has a longer-term goal to raise overseas sales to 3.8 trillion won.