Gov’t moves to offset high oil prices

The government will soon announce a set of measures to help control soaring oil product prices that can hurt economic growth, the country’s top economic policy maker said yesterday.

Minister of Strategy and Finance Bahk Jae-wan said at a weekly economic policy maker meeting that high global crude oil prices have placed a huge burden on the economy, Asia’s fourth-largest.

“Crude prices have stabilized a little recently but there is a need to address this problem,” he said.

The minister stressed that he will call for close cooperation with other Group of 20 members to tackle this critical issue when key industrialized and developing economies meet in Washington later in the week.

The price of Dubai crude, Korea’s benchmark, averaged $122.5 per barrel last month, up from $116.2 in February and $106 per barrel for the whole of 2011.

Higher crude prices have pushed up both gasoline and diesel fuel prices that can exert a negative influence on consumer prices. The soaring prices also affect prices of manufactured goods and farm products, as well as service charges.

“Seoul will announce a comprehensive plan that includes the expansion of bargain gas stations and the introduction of an electronic exchange for fuel products to help lower prices,” he said.

The announcement is expected to be made by the Ministry of Knowledge Economy, which oversees industrial and energy policies.

The policy maker said the country has made strides in recent decades in terms of its R&D potential but there is a need to strengthen tie-ups between laboratories and companies. Yonhap