Gov`t to Control Oil Supply If Crude Oil Prices Skyrocket

The government decided to invoke an emergency order to control the oil supply, and to release oil from the government reserve if crude oil prices skyrocket due to the aggravation of the terror incident in the U.S.

The government also plans to consider issuing additional government bonds to revive the domestic economy, and to come up with contingency economic measures by next weekend.

The government held a joint meeting of civilians and government officials at Cheong Wa Dae yesterday, presided over by President Kim Dae-Jung. Deputy Prime Minister Jin Nyum, the president of the Federation of Korean Industries Kim Gak-Jung, minister of economy and other chairpersons of the economic organizations attended the meeting to discuss countermeasures in economy following the terrorist attacks in the U.S.

The government decided to invoke an emergency order to control the oil supply to prevent people from stocking up on fuel if the long-term rise of oil prices is anticipated due to the aggravation of the situation.

In order to stabilize the oil prices, the government plans to suspend imposing energy levies on oil imports, to release oil from the government reserve, to lower transportation and special excise taxes on gasoline and diesel, and to enforce the highest price system. However, if oil prices rise only for a short-term, the government plans to request domestic oil refineries to absorb it on their own.

Along with this, the government decided to expand investment and loans to the maximum amount without reducing the annual expenditures even if the outlook on the annual revenue is unclear due to the worsening economy.

President Kim ordered the economic team to ``prepare for the countermeasures to cope with a worst-case scenario, especially to prepare to insure energy resources, to expand the investment on the state-run companies, and to carry out the budget and the funds at an earlier stage.``

The business leaders of the economic organizations decided to gather the strengths to overcome the economic difficulties following the terrorist attacks in the U.S.

Meanwhile, in a radio talk show, Deputy Prime Minister Jin Nyum implied the possibility of issuing the government bonds despite the financial deficit, saying that ``although it is better not to issue additional government bonds, it is also irresponsible attitude for the government to adhere to the recovery of the balanced finance, because the issue of unemployment and the possible insolvency of the solid companies will come up due to the worsening economy.`` However, Jin added that ``the government will decide the amount of the government bonds to be issued after discussing it with the opposition party. Hence, I cannot talk about the amount at this moment.``

An emergency order is a measurement which the government forcefully controls the oil supply and demand for the oil refineries, exports, and sales people. This order is enforced when there is a serious problem or a possible problem in oil supply and demand, and it is possible to control the distribution of oil to each region, the rate of operation of oil refinery facilities and the production of oil by the item.

yhchoi65@donga.com