Vice Prime Minister unveils gov’t plan to extend oil price cut, control prices

Vice Prime Minister and Minister of Economy and Finance Choo Kyung-ho announces at the meeting on price and public livelihood held at the Government Complex in Seoul on Sep. 15. [Photo by Yonhap]

South Korean Vice Prime Minister and Minister of Economy and Finance Choo Kyung-ho said Friday that the government will redouble its efforts to stabilize oil prices, hinting at a further extension of the fuel tax cut.

“We have extended the fuel tax cut and oil price-linked subsidies until October to respond to the high volatility of international oil prices,” Choo said in his opening remarks at the meeting on price and public livelihood that he chaired at the Government Complex in Seoul. “We will consider further extensions as we monitor the movement of international oil prices.”

Choo also mentioned that the Korea National Oil Corp. and the Korea Petroleum Quality & Distribution Authority have been jointly conducting on-site inspections at gas stations in major areas across the country since Thursday. He stressed that the government would keep daily tabs on price trends as well as cooperating with the industry and relevant organizations to stabilize oil prices.

“The overall price level has been stabilizing and on a downward trend, but it temporarily increased 3.4 percent in August due to rising international oil prices, heatwaves, and heavy rains,” Choo said. “The core consumer price index excluding volatile food and energy has remained stable, and we expect prices to stabilize again as we head into October.”

In terms of public utilities, he said that “the Ministry of the Interior and Safety will actively cooperate with local governments to absorb rate increases through individual efforts as far as possible and, if unavoidable, spread, postpone, or minimize the increase.”

Choo explained that the government will encourage local governments to make such efforts and grant financial incentives of 8 billion won ($6.02 million) in special grant taxes according to their contribution towards efforts for regional price stability management.

He also added that the government is focusing its policy efforts on prices for agricultural, livestock, and marine products, which directly affects grocery shopping prices, and that the average price of the top 20 Chuseok holiday seasonal products remains 6 percent lower than last year.

“For apples and pears, which increased in price last month due to unstable supply, we will provide additional support for part of the freight charges starting next week to encourage timely shipments and supply an additional 20,000 bargain gift sets, which are up to 20 percent cheaper than the market price,” Choo said.

Procedures to introduce quota tariffs on an extra 15,000 tons of pork on top of the current 15,000 tons are also underway, he added.

“In addition to the existing nine markets, a total of 21 fisheries markets nationwide will provide a 40 percent cashback event for the use of Onnuri gift certificates until the end of 2023,” Choo said. “We will do our best to execute the 80 billion won reserve to promote seafood consumption.”