Deputy Prime Minister and Minister of Finance and Economy Koo Yun-cheol said Sunday the government would elevate its energy crisis alert to Stage 3 if prices breach that threshold. The country currently asks civilians to voluntarily observe an odd-even license plate driving system, but Koo indicated that compliance could become compulsory.
"If the situation deteriorates further, we will need to move to Stage 3, and at that point we may have to ask the public to cooperate with a mandatory vehicle rationing system," Koo said.
Oil prices currently hover between $100 and $110 per barrel. Koo said the government would assess a range of factors beyond crude prices alone before raising the alert level, adding that further fuel tax cuts remain on the table to cushion the burden on households.
To address a naphtha shortage disrupting petrochemical and consumer goods production, Koo said Seoul is securing alternative supply sources and prioritizing allocation across industries. The government is also accelerating its shift toward nuclear and renewable energy to reduce dependence on imported fossil fuels.
On the fiscal front, Koo outlined a supplementary budget of about 25 trillion won ($16.5 billion) targeting four areas: high oil price countermeasures, support for small business owners and young workers, industrial relief, and supply chain stabilization. He stressed the spending would be financed by projected surplus tax revenue rather than new debt.
Koo also sought to calm nerves over the won's slide past the 1,500-per-dollar mark, citing South Korea's foreign reserves of more than $420 billion and net external assets of about $900 billion. He pointed to the country's upcoming inclusion in the World Government Bond Index in April, which is expected to attract $50 billion to $60 billion in foreign capital inflows.
The deputy prime minister additionally previewed a "new deal" package for youth due in April to tackle rising youth unemployment, and said the government's first investment project in the United States under a recent bilateral investment law would likely focus on the energy sector.
Copyright ⓒ Aju Press All rights reserved.