South Korea to review fuel policies

The government of South Korea is reviewing the government’s fuel policies, as part of the country’s fight against inflation. Possible outcomes of the new policies are a cut in the oil tax, and letting the state-owned Korea National Oil Corp. to sell oil products in the domestic wholesale market. In addition, the government may address the way companies calculate gasoline and other oil-product prices. Alex Yap, an analyst with Facts Global Energy in Singapore, believes that the government will stop short of adopting state-determined pricing regimes. “I think it’s pretty unlikely that Korea will move to state-controlled pricing. Korea is a 100% crude importer, and any losses from price controls would have to be paid by the companies, or the government, through subsidies.” He suggests that the government might institute policies that would require greater transparency for retail pricing. (April 7, 2011)