South Korea raised its energy alert level on Sunday and will launch a set of emergency conservation measures on Monday to counter surging crude oil prices, the Ministry of Knowledge Economy said.
The government upgraded the country’s energy alert level from “blue” to “yellow,” the third-highest in the country’s four-tiered system. The country issued the “blue” alert level on Dec. 29 when prices for a barrel of crude surpassed the $90 mark.
The latest move comes as the price of benchmark Dubai crude oil has been topping the $100 per barrel mark for the last five days.
Libya cut its daily oil production from 1.6 million to 400,000 barrels due to intensifying turmoil in the country.
The international oil market seems to have calmed a little over the weekend due to news that Saudi Arabia will boost its oil production and the International Energy Agency assuring stable oil supply.
Yet the Korean government seems to be taking a cautious step because uncertainties still remain regarding situations in countries in North Africa and the Middle East including Libya.
“Even if a serious supply outage might not occur, there is a possibility that the price of crude oil might go up further in the future should the situation in the region persist for a while,” ministry officials said.
Under the “orange” alert, the government will require outdoor scenery lighting for bridges, buildings and monuments to be turned off and call on all public offices to cut back on power use.
Violators caught after a seven-day grace period will be fined up to 3 million won, the ministry said.
Alongside enforced measures, the ministry said it will encourage active participation from the private sector by offering financial incentives.
Authorities will also ask industries to monitor overall energy use at workplaces and turn off power in non-essential areas, and to restrict shops and large apartment complexes from lighting up building exteriors and sign boards late into the night.
Ministry officials said the energy alert level can later be raised to “orange,” which is the second-highest level if oil prices continue to rise.
The “orange” alert can be issued when crude prices stay above $130 per barrel for five days, while the highest “red” alert is issued when prices surge past the $150 mark.
Meanwhile, the finance ministry said it is mulling contingency plans covering oil supply, financial markets and inflation to minimize economic fallouts from growing unrest in the Middle East.
The government may cut taxes on oil and put forward other measures should the Dubai oil price stay above $130 per barrel, officials said.
Korea reported an oil reserve of 173 million barrels as of December, which is enough to meet all domestic demand, including fuel needed in the industrial sector, for 73 days.
