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    Korea
     Jul 8, 2005
Seoul mulls measures to curb oil consumption

SEOUL - South Korea, the world's fourth-largest oil importer, plans to take measures to rein in demand for oil, such as restrictions on driving, the government said on Thursday.

Public baths, retail outlets and other energy-gulping businesses will also be encouraged to cut their working hours and raise air-conditioning temperatures, according to the Ministry of Commerce, Industry and Energy.

The measures come amid concerns that oil price hikes may take a toll on Asia's third-largest economy.

Oil prices, measured by South Korea's benchmark, hit a record high of US$54.67 per barrel on Wednesday. The average price of Dubai crude was $44 per barrel in the first six months of the year, well above last year's average $34 per barrel.

Crude-oil futures also marked their first-ever close above $61 a barrel in New York on Wednesday as severe weather shut down several oil and gas rigs in the Gulf of Mexico.

The Finance Ministry cut its growth forecast for the year to 4% from 5% as higher-than-expected oil prices may cripple already-weak private spending.

The Bank of Korea, the country's central bank, also trimmed its growth estimate to 3.8% from 4%, citing runaway oil prices.

The South Korean economy grew at a slower-than-expected rate of 2.7% in the first quarter as a recovery in domestic consumption was not strong enough to offset a slowdown in exports.

Last month, the Commerce Ministry said Seoul's oil and gas bills may increase as much as to $60 billion this year due to soaring oil prices. Last year, South Korea spent around $50 billion on importing oil and other energy sources.

The ministry also unveiled a set of energy conservation measures under which the government may tap its strategic petroleum reserves should global oil supplies be disrupted.

It also plans to raise the country's oil reserves to 135 days by 2008 from the current 106 days. In addition, the government also aims at increasing the country's self-sufficiency in oil supplies to 15% by 2013 from 10% in 2008, which will cost an estimated 10 trillion won, according to the ministry.

(Asia Pulse/Yonhap)

 

 
 



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