Oil prices too high

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Oil prices too high

Oil companies have been inflating the wholesale price of gasoline. Last month, they announced that the prices stood at 603 won (65 cents) per liter before taxes. However, they sold gas at the much lower price of 563 won per liter. They announced a wholesale price an average of 40 won higher than the actual price. For light oil, prices were 77 won higher per liter and for diesel oil, 118 won higher.
The oil companies claim that wholesale prices are merely a standard price that they set for the convenience of consumers, making them different from the actual factory prices.
They said that actual prices went down because of competition between companies. However, we cannot understand why they are choosing this time to give this important explanation.
Until now, people believed that wholesale prices were the same as factory prices. Since they didn’t know that wholesale prices were inflated, they naturally assumed that retail prices based on these wholesale prices would be high as well.
The government is pathetic because it was unable to grasp the price structure of oil. In fact, this investigation was launched after the public began complaining about high oil taxes only, so the government could divert accusations toward the oil companies.
It seems like the government is pushing oil companies into a corner and trying to smooth over the matter. The superficial reason the government is not lowering oil taxes is because if oil prices go down, excessive consumption will go up.
That means that if oil prices are reduced, everyone will drive their cars on the streets, but this logic is an insult to the public’s intelligence.
The real reason is because the government does not want to give up a tax that is so easy to collect.
Oil taxes make up 60 percent of oil costs; last year, the tax agency collected 26 trillion won in oil taxes, a 10-trillion-won increase in just six years.
While taking on massive state-initiated projects, the government increased the number of public officials and hired more public servants.
It is hard to imagine the government waiving taxes for these people.
The government should acknowledge the essence of the problem: Korean oil prices are far too high compared to those in developing countries. The government should lower liquor taxes and lift the burden from the people so they can stabilize oil prices.
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