Korea studies measures to cope with energy shortages

Jan 21, 2003 01:00 AM

The Korean government has been studying all kinds of measures to cope with energy shortages which are expected to develop in case of war in Iraq, as the possibility of a US invasion of the Middle East country remains high, the Ministry of Commerce, Industry and Energy said.
The ministry, in a report to the Cabinet meeting, said it will consult with concerned government ministries on its plan to link energy savings plans with oil price policies in three stages. In the first stage, the price of Dubai crude will rise to $ 30 per barrel, to $ 35 per barrel in the second stage, and the oil supply will be seriously hampered in the third stage.

The ministry plans to hold consultations with related ministries on rearranging tariff rates and the transportation taxes in the first stage of the oil price rises. In the second stage, the tax rates on fuel oil and other domestic taxes will be lowered with the payment of other assessments on oil products being delayed.
In the third stage, the oil reserves will be tapped, along with the use of the oil buffer fund to stabilize oil prices. A maximum pricing system for oil will be instituted. The ministry said the situation has reached the first stage already, signalling it has already started consultations with related ministries on reducing taxes on oil.

The ministry is reviewing a number of measures to cope with energy conservation including 10th-day no-driving system and no light bulbs on Christmas trees in downtown areas. A cash back system whereby a household that saves from 10 to 15 % in the use of electricity and gas will get a portion of its energy bill returned is also being considered.
In the second stage, under the energy savings measures, entertainment spots including midnight movie houses will be required to put out their outside lights and their business hours shortened. Golf practice joints and ski courses will also be required to conserve their mid-night electricity use.

Elevators will operate from the fourth floors of a building with stops in every other floor from the fourth floor with no permits issued for mid-night power use. In the third stage, power supply will be limited for large energy users and the district heating stations will also limit their heat supply by hours.
Fuel oil will be rationed if necessary, according to measures being studied by the ministry. A ministry official said the ministry is looking into legal matters to see if the 10th-day no-driving system is enforceable as it is directly related to people's daily living and has legal implications.

Source: Asia Pulse ||Philippines set guideline for oil stocks 21-01-03 The Philippines, which imports all its crude requirements, set a guideline for the first time on the minimum level of inventory oil companies must maintain in case war breaks out in Iraq. The Department of Energy issued a circular requiring its three refiners to keep a stock of at least 30 days for crude and oil products. Those in transit are not included in the counting of the stock required.
Bulk suppliers of petroleum products and distributors would be required to maintain a stock equivalent to 15 days of supply, the circular said. "The escalating tension between the United States and Iraq underscores the need for the Philippines to adopt and implement timely and prudent initiatives to ensure the continuous, adequate and stable supply of petroleum products in the country," Energy Secretary Vincent Perez said.

The three refiners -- Petron, Pilipinas Shell Petroleum and Caltex (Philippines) -- supply 88 % of the market. Small players account for the rest. Data from the energy department showed that as of January 13, the three refiners together had 23 days supply of crude and 22 days of petroleum products already in the country. Crude in transit to the Philippines at that time was equivalent to 17 days supply. The Philippines consumes 330,000 barrels of crude and petroleum products each day.
The new guidelines said the oil firms had been given an option to decide on the type and mix of petroleum products to be stored, provided they give priority to stocking diesel and gasoline for the transport sector, fuel oil for power generation and LPG for cooking. It said all oil firms, except the refiners, must maintain a seven-day inventory of LPG.

Petron is a venture between state-owned Philippine National Oil Co. and Saudi Aramco. Pilipinas Shell is a unit of Shell while Caltex is owned by ChevronTexaco.

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