A hike in subway fares in the capital region has become inevitable as next year's budget has excluded funds for compensating the growing deficit of Seoul Metro.

According to the Seoul Metropolitan Government on Sunday, funds for public service obligation (PSO) compensation for local governments' subway operators were excluded from the 639 trillion won budget that passed in parliament on Saturday.

The PSO compensation means financial subsidies by the government for the operation of rail services under a public service obligation.

Seoul Mayor Oh Se-hoon recently said that the city must consider raising subway fares next year unless the central government compensates for a growing deficit from free subway rides for elderly citizens.

The basic subway fare for subway lines in the capital city has remained at one-thousand-250 won for eight years since the last hike in 2015.