To respond to the surge in international oil prices due to the Middle East situation, the government will simultaneously pursue adjustments to the oil price cap system and a fuel tax cut starting on the 27th.
Koo Yun-cheol, Deputy Prime Minister for Economic Affairs and Minister of the Ministry of Economy and Finance, reported "status and plans related to the Middle East situation" at a Cabinet meeting at the presidential office on the 24th, and said, "The government will do everything it can, including a war supplementary budget, adjustments to the price cap system, a fuel tax cut, supply chain responses, and the maximum possible policy efforts."
Regarding the rationale for linking the price cap adjustment with the fuel tax cut, Deputy Prime Minister Koo said, "We have to adjust the price cap set on the 13th on the 27th, and due to the impact of rising oil prices, the maximum prices of petroleum products may rise in some cases," adding, "To prevent a sharp increase, we will also cut the fuel tax to minimize the burden on the public."
He added, "Diesel prices are rising sharply, but we will minimize the increase to ease the burden on ordinary people," and "In addition to the supplementary budget, we will push forward whole-of-government measures against high oil prices using every policy tool available."
On the current Middle East situation, Deputy Prime Minister Koo said, "It is a situation where we cannot see even an inch ahead," and noted, "It is true that concerns about supply disruptions are somewhat expanding for items with high dependence on the Middle East." He continued, "Rising oil prices are feeding into higher consumer prices and increasing the cost of living for the public, while also heightening downside risks to the economy, so the government is watching closely."
To stabilize energy supply and demand, the government will actively develop and diversify supply sources, and will simultaneously proceed with releasing strategic reserves and expanding alternative generation such as coal and nuclear power. Along with preemptive responses to supply chain disruptions, it also plans to phase in the odd-even license plate driving system for cars.
The supplementary budget bill will be drawn up with speed to be submitted to the National Assembly by the end of this month. It will be built around cutting fuel costs, stabilizing livelihoods, and supporting export corporations, and aims to establish a close-knit safety net for people's livelihoods through direct and differentiated support for low-income people, small business owners, farmers, youth, and local communities.
Deputy Prime Minister Koo said, "If supplementary budget support is provided to export small and midsize corporations, we will ensure seamless one-stop support delivery." In addition to the supplementary budget, the government will consider expanding the existing 2.03 trillion won in policy finance to support affected corporations.