Schedule Advanced for 2nd Energy Contingency Plan

President Lee Myung-bak yesterday ordered a faster implementation of the “second-phase contingency plan” if oil surpasses 150 U.S. dollars per barrel.

The government used the term “crisis” when announcing its first contingency plan, but yesterday was the first time for the president to call the situation “a crisis.”

“President Lee today ordered the Cabinet to actively cope with economic issues under the leadership of the Strategy and Finance Ministry,” said Strategy and Finance Minister Kang Man-soo.

“Accordingly, the second phase contingency plan that was supposed to take effect when Dubai crude exceeds 170 dollars per barrel will be carried out if the price hits 150 dollars.”

Dubai crude reached 138.91 dollars a barrel Monday, down 1.79 dollars from Friday. Given the surge in oil prices, however, forecasts say oil prices will surpass the 150-dollar mark soon.

Under the plan, if the price rises 12 dollars, energy conservation measures will be introduced such as restricting driving nationwide, limiting businesses that use lots of energy, and reducing electrical use at night.

The restricted driving program would make drivers give up driving one weekday per week. The system is being implemented voluntarily but if the second phase takes effect, it will be expanded nationwide.

Businesses that consume a lot of energy such as public baths, golf courses, amusement parks and restaurants will be put under state supervision. Public baths will have to close once every two weeks and the remaining businesses must greatly reduce business hours.

TV airtime will be cut and big retail stores covering more than 3,000 square meters must turn off its outside lights after business hours. Gas stations selling gasoline and liquefied petroleum gas must turn off half their lights except at main facilities such as gas pumps.

The Strategy and Finance Ministry decided to change the economic policy coordination meeting into the contingency management meeting. Ministers will attend the contingency meeting every Friday. The economic meeting is intended for coordinating views among ministries but the contingency meeting focuses on stabilizing prices and coming up with measures to help citizens.

On the fear that the contingency meeting could incite an exaggerated sense of crisis, Kang said, “We are saying the crisis is a crisis to gain public cooperation.”

Aside from energy conservation measures, the first contingency management meeting Friday will seek to encourage small and medium-size firms to hire one employee each and larger companies to hire 10 percent more employees each.

legman@donga.com