South Korea will likely raise highway and train service fares by the end of this year following years of unchanged rates aimed at curbing inflation, a source said Friday.

The finance ministry and the transportation ministry are currently in the last phase of talks to determine when and by how much they will increase fares for the two major means of transportation, he said.

Highway fares will likely increase by less than 3 percent, while those for trains will go up about 3 percent. The hike is expected to be implemented in the middle of December, the source said.

South Korea has not raised fares for highways and train services for about five years as the government remains reluctant to hike public transportation prices on fears that it could exert upward inflationary pressure.

But demand is growing to adjust transportation fares to reflect higher operational expenses amid worries the state-run providers are taking on too much debt due to the government-imposed fare freeze.

(Yonhap News)