[EDITORIALS]To combat high oil pricesThe price of oil on the international market has been setting record high prices day after day. Experts predict that the price hike will continue for a prolonged period. In other words, an age of high oil prices has arrived.
The hike of oil prices affects the pattern of consumption of individuals, production activities of industries and the overall economy. The impact on the Korean economy is especially strong, since it relies on exports and produces no oil. We urgently need to make up our minds on a plan to minimize the shock from high oil prices that came together with the “China shock.”
Our energy policy is based on the premises of stable supply and low prices. The planned government measures are more in the nature of a temporary fix to counter the rising prices. The price of crude in the market, however, has exceeded the $40 mark and is expected to continue marching higher. It is necessary to readjust our overall energy policy to make it suitable to an age of high oil prices ― a supply and consumption plan, price structure and tax system.
South Korea is known as a country that consumes energy excessively. For a non-oil-producing country, there is no other way but to save energy. The energy efficiency of industrial facilities must be enhanced, and there must be measures for reducing the unnecessary use of energy, such as ending round-the-clock operations at bath houses.
If the oil price rises $5 per barrel annually, research says that the growth rate of our gross domestic product will drop 0.3 percent, consumer prices will rise 0.5 percent and the balance of trade will deteriorate by $6 billion. If the current trend of price rises continues, the nation’s economic recovery will be damaged and the sufferings of our people will get worse.
But industrial activities should not be restricted. Energy must be supplied to those who need it, but it must be saved at places where we can save. The oil price rise will not end now; we must prepare long-term and fundamental plans at the same time.
The government has presented many plans, but they disappeared as soon as oil prices fell. The administration must find all available long-term countermeasures, including the use of more nuclear energy, and get the understanding of the people.