Korean government goes all-out to stabilize prices, living conditions

[Photo by Kim Ho-young]

The South Korean government has rolled up its sleeves to tame inflation, mainly driven by rising import prices such as those of international oil.

According to the data released by the Bank of Korea (BOK) on Tuesday, the import price index gained 2.9 percent in September from a month ago, driven by higher prices of mining, coal, and petroleum products amid a surge in international oil prices. It is the third straight month of gain.

Prices of crude oil soared 8.8 percent in September from the previous month.

The price of Dubai crude oil averaged $93.25 in September, up 7.9 percent from $84.46 in August. Prices of naphtha rose 9.3 percent, propane gas 18 percent, and butadiene 26.5 percent during the same period.

“The prices of mining and petroleum products surged sharply as international oil prices go up as a result of production cuts by oil-producing countries,” said Yoo Sung-wook, head of the price statistics team at the BOK.

The Korean government is taking measures to tackle rising oil prices.

In a meeting on Tuesday, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho expressed concerns about increased uncertainty surrounding inflation due to rising international oil prices and volatile weather conditions.

He emphasized the government’s commitment to stabilizing food prices, which have been experiencing fluctuations recently.

As part of its effort to alleviate the cost pressure on households, the government plans to release 2,200 tons of cabbage over the next two weeks ahead of the kimchi-making season.

The supply includes 700 tons from the government’s reserves. It will also supply 1,000 tons of sea salt at half the price starting from the end of this month.

It will also provide up to 30 percent discounts on 12 agricultural products prone to price volatility from Thursday, such as cabbage, leeks, and apples.

The government had provided discounts of up to 60 percent on food items such as pollock and mackerel last week. Choo emphasized the need for collective efforts to establish a stable pricing system and called on industries to control price pressures by reducing costs and improving productivity.

The finance ministry also said that it will extend the tax cuts on fuel for two more months until December.