Korea to Tighten Belt on Energy Use
By Kim Hyun-cheol
Staff Reporter
The government will unveil a two-stage energy saving contingency plan this week designed to tackle soaring oil prices, officials said Sunday.
The decision was made Saturday in a meeting of economic ministers chaired by Strategy and Finance Minister Kang Man-soo.
Details of the plan will not be made public until it is put into effect out of concerns that it may distort the market, and provoke the hoarding of oil.
The first-stage of the plan will be put into action when Dubai oil reaches $150 per barrel ― the price of the benchmark passed $135 per barrel Friday, up more than double from last year.
Policymakers will put obligatory limits on air conditioning and lighting at public facilities. Civil servants will be required to keep their cars at home at least once a week, up from the current no-driving day held every 10 days.
The private sector will be subject to the rules in the second stage if Dubai crude prices exceed $170 a barrel. A further tax cut on petroleum products is also a possibility.
Drastic actions such as rationing electricity and oil could also be considered if oil prices go over $170 and the oil supply is in bad condition, the ministry said.
It added the government is not considering a price-cap system, which was introduced here during the Gulf War in the 1990s.
Under the price cap, the government sets the maximum price limit of oil products and subsidizes any gap from state coffers.
``Currently Dubai oil prices are about 4.5 times higher than the Gulf War days,'' the ministry said.