Dubai Oil Soon to be $30 Per Barrel

Among the crude oil imported into Korea, Dubai Oil takes up the majority. The price of the Dubai Oil has increased almost to $30 per barrel in the international market. The North Sea Brent Oil and others have also showed increasing trend in their prices. The increase in oil price is expected to have severe affect on the Korean economy.

On January 30th, according to the Korea National Oil Corporation (KNOC), the trading price of Dubai Oil on January 29th (local date) is $29.01, a $0.09 increase from previous day.

The price of North Sea Brent Oil is $31.21, a $0.60 increase from previous day. The Western Texas Oil (WTI) is $33.60, a $0.92 increase from previous day.

According to the KNOC, the price increase was caused by anxieties from possible upcoming American-led war against Iraq between February and March. Another reason is due to news of decrease in the American oil reserve.

The Dubai Oil price is expected to exceed $29. The Korean government has announced previously that if the average 10-day price of Dubai Oil exceeds $29, they will intervene in the market. The government will implement policies such `Driving Rotation`, lower oil import tax and other measures to stabilize the domestic oil price.

On January 29th, the average 10-day price of Dubai Oil was $28.74, a $0.12 increase from previous day ($28.62). This steadily increasing price is higher than the government`s monitoring average price which began on 22nd with $28.22.

Meanwhile, the Ministry of Commerce, Industry and Energy (MCIE) has announced an implementation of `Energy Saving Cash Refund` campaign for ten thousand households with 10% reduction in the energy consumption. The refund consist of 10,000 won in electricity, 20,000 won in gas and heat, up to total of 30,000 won in total.

Those households who wish to participate for this campaign can apply through Korea Energy Management Corporation (KEMCO) website (www.kemko.or.kr) by January 5th, 9.00 a.m.

The MCIE and KEMCO will select first ten thousand households. For duration of February and March, if the household electricity consumption is 10% less than comparative months of previous year, the household gets cash refund. The participants are required to be permanent residents (at least over a year) and must have an individual household electricity and gas meter. For inquiry, phone KEMCO, 031-2604-411∼2

Ja-Ryong Koo bonhong@donga.com