Koo Yun-cheol, deputy prime minister for the economy and Minister of the Ministry of Economy and Finance, said on the 29th that if international oil prices reach $120–$130 per Barrel, the government will raise the energy crisis response level to "level 3 (alert)" and could expand the odd-even license plate driving system to the private sector.
Koo appeared on KBS "Sunday Diagnosis" and said, "If the situation becomes more serious, we should go up to about level 3," adding, "We think we should introduce the odd-even system to ask the public in the private sector for cooperation." The government is currently asking for voluntary participation, but it could later be made mandatory.
On the criteria for raising to level 3, Koo said, "Oil prices are currently at $100–$110, but if they rise to $120–$130, we will look at various factors comprehensively," emphasizing, "At that point, consumption should also be reduced."
To ease the impact of high oil prices, the government is keeping open the possibility of an additional fuel tax cut, securing alternative import sources to prepare for supply disruptions of feedstocks such as naphtha, and reviewing adjustments to usage priorities. It also plans to increase nuclear power plant utilization and expand renewables such as solar and wind in parallel.
The roughly 25 trillion won supplementary budget to respond to the fallout from the Middle East war will focus on four pillars: responding to high oil prices, supporting livelihoods such as small business owners and the self-employed, industry support, and supply chain stability. Koo said, "We will finance it with excess tax revenue; we are not taking on debt."
Regarding the rise in the exchange rate, Koo noted that foreign exchange reserves exceed about $420 billion and external net worth is around $900 billion, and said, "The situation the public is worried about will not occur." He then presented the introduction of the return-to-Korea investment account (RIA), inclusion in the FTSE World Government Bond Index (WGBI), and a push for inclusion in the MSCI developed markets index as the "three-package response on the exchange rate." In particular, he said inclusion in the WGBI is expected to bring in $50 billion–$60 billion.
On real estate taxes, Koo said, "We are still listening to various opinions, and nothing has been decided." As a youth employment measure, he said, "We will announce a youth New Deal policy in Apr.," adding that it will include work experience, education, and startup support.