Dubai oil, which accounts for 78 percent of Koreas oil imports, reached another high of $48 a barrel. International oil prices are also soaring for consecutive years.
In response to the big hikes, the government plans to spend 200 billion won on Small and Medium Sized Enterprises (SMEs) that succeed in boosting their energy efficiency, and to require obligatory energy inspections of energy-guzzling businesses.
These countermeasures came at a meeting for the coordination of economic policies held on March 18 at the government office located in Gwacheon, Gyeonggi Province. The meeting was presided over by Deputy Prime Minister and Minister of Finance Han Duck-soo.
According to the plan, the government will set aside 195 billion won, 30 percent of 649 billion won, which is to be spent to promote greater efficiency in using energy. The 195-billion portion will go to SMEs that will replace old production facilities with newer facilities.
In addition, the government will encourage smaller firms to develop energy-related technologies by granting an energy-related technology fund of 61 billion won to consortiums between SMEs.
At the same time, the government decided to necessitate energy inspections and the appointment of energy managers. Its target will be energy-guzzling companies that spend more than 2,000 tons of oil equivalent (TOE) annually. The aim is to increase the energy efficiency of industries.
If 2,000 TOE is translated into cost, the governments target includes firms that annually spend more than 540 million won on energy.
In case that the governments remedies do not work, and continuously rising oil prices disrupt the oil supply, it is willing to curb oil consumption by implementing forcible steps. One option is no-vehicle day based on the last number on license plates.
According to the Korea National Oil Corp., Dubai oil, locally traded on March 17, went up $1.67 to $47.90 per barrel, setting an all-time high. North Sea Brent crude oil rose 69 cents to $55.77 per barrel. Only West Texas Intermediate (WTI) closed lower at $56.33, 13 cents cheaper than its previous close.