South Korea will open more “bargain” gas stations in 2012 as part of efforts to ease the pain of ordinary citizens from heavy energy costs, the Finance Ministry said Wednesday.
The bargain gas stations, which were launched in December, usually receive their fuel from state-run agencies at cheaper prices than other existing gas stations. The government plans to increase the number from 369 to 430 by the end of March.
In a related move, the government will also unveil a comprehensive package of measures in March to boost the operation of the gas stations. They will include efforts to further lower oil supply prices to those outlets, the ministry said.
The move comes as high international crude oil prices are causing gasoline and diesel costs at the pump here to skyrocket in recent months. Gasoline prices, in particular, have topped 2,000 won ($1.78) per liter.
The government has been pushing to lower consumer oil prices by fostering market competition. Introduction of the bargain gas stations is part of such efforts.
It also plans to launch an electronic trading system for petroleum products next month to help determine their prices based on supply and demand situations in domestic markets.
Global oil prices are a major factor that affects the inflation situations here as South Korea depends on imports for almost all of its energy needs.
Finance Minister Bahk Jae-wan told reporters that the government will consider lowering taxes on oil products if international crude oil prices stay over $130 per barrel for five days or longer.
It would be part of the country’s contingency plan to be activated in case fuel prices exceed the mark. The Dubai crude oil, South Korea’s benchmark, closed at $121.81 per barrel on Tuesday.
A tax reduction, however, is unlikely to be offered to all citizens, and would likely be offered only to the underprivileged, whose livelihood is more vulnerable to high oil prices, Bahk added.
Taxes make up about 47 percent of gasoline prices in South Korea. Consumer groups have been demanding oil tax cuts to ease people’s pain at the pump, but the government remains cautious, saying that the move would not translate into a sufficient decline in fuel prices, but lessen the country’s overall tax revenue.
South Korea temporarily slashed oil tax rates by 10 percent in 2008 when crude oil prices skyrocketed. Many experts say that it was not enough to make a dent in prices for consumers at gas stations.
(Yonhap News)
