[EDITORIALS]Oil price hikes can hurt usAs misfortunes never come singly, additional catastrophes from abroad are adding to the burden of our struggling economy. In the wake of the shortage of raw materials like scrap iron, the skyrocketing price of oil is adding pressure to the already stricken Korean economy.
The decision by OPEC to reduce oil production and the uneasiness caused by the terror bombings in Spain have contributed to the sudden price increase of West Texas Intermediate crude, which has reached its highest point since the Gulf War of 1990. The price of Middle East Dubai crude, which makes up 80 percent of crude oil imported into Korea, has risen to $31 per barrel. For the first time in Seoul, gasoline costs more than 1,400 won per liter and diesel fuel has surpassed 900 won. There is no sign of price decreases in the near future.
Because Korea depends solely on imports for petroleum products, the price hike of crude oil is a serious problem. There will also be a big impact on investment, the balance of payments and job creation.
The government’s economic management plans were based on an average international oil price of $24-25 per barrel. If this situation continues, however, those plans will be thrown into disarray. High oil prices are also bad for the recovery of the international economy.
To minimize the impact, we must hasten to set up both short- and long-term countermeasures. Above all, we should stop the reckless use of oil. In addition to the voluntary program to leave cars at home one day in ten, we need a plan to cut back further while still doing our work. We must also make sure the increase of oil prices does not lead to inflation.
In the long run, we must diversify our import sources and convert our domestic industries to ones using energy more efficiently. Especially, we must continuously promote energy conservation by companies and consumers. Until now, whenever an oil crisis occurred, we made a fuss but then soon forgot about it. Around us, excessive energy consumption is becoming more common, and as a result, we are more easily exposed to external shocks.
This situation has been repeating itself over and over again. This time, we must come up with a fundamental solution that ends this recurring problem.