14-11-04

As part of South Korea's ongoing efforts to better conserve energy, more than 1,600 government and private officials took part in the 26th Energy Conservation Convention on Nov. 12 and pledged to establish an efficient energy policy to become more immune to negative factors affecting the country's fuel supply.
Lee Hee-beom, the Minister of Commerce, Industry and Energy said that events such as the political and military uncertainty that prevails in the Middle East, from where Korea fills about 80 % of its oil demand, the increasing disruptions to the global fuel supply and rapidly deteriorating environmental conditions, have all contributed to high prices for Korea's oil.

Korea is the world's 11th-largest economy, but in terms of oil imports, it ranks much higher at fourth place. Last year, it imported a little over 800 mm barrels of crude oil.
According to figures from the Korea Energy Economics Institute, Korea's demand for oil and other fuels will increase at a faster pace this year as economic growth accelerates. Total demand for fuels will rise 3.3 % to the equivalent of 222.1 mm tons of oil from 215.1 mm tons in 2003, the publicly funded research group said in a report. Demand rose 3.1 % last year. The projection is based on the assumption that Korea's economy will growth 5.2 % this year after expanding 3.1 % in 2003, the group said.
“The rise in energy demand will be slower than the country's economic growth because a sharp rise in global oil prices will dampen consumption of oil products in the household and transport sectors," the report said.

In a recent announcement, President Roh Moo-hyun said the government is seeking legislation to launch a presidential committee to draw up mid and-long-term strategies for stable energy supplies for the country.
“South Korean Ministry of Justice is coming up with a bill to seek a comprehensive national energy policy," said Roh at a meeting of government officials, business figures and experts. The president has been pursuing energy policy reforms, having recently visited Russia, Kazakhstan, India and Vietnam to gain agreements on Korea's participation in domestic oil and natural gas development projects in those countries.

This year's record-high international crude oil prices have been affecting the local fuel market with Dubai crude, Korea's benchmark, soaring to more than $ 38 per barrel.
Local oil importers were hard hit, with some facing bankruptcy in the worst cases. Pedaco, the country's largest oil importer, filed for bankruptcy in October last year, while Huron, an importer of Bunker C oil, suspended operations in May this year. Only 4 or 5 of the more than 40 registered importers are said to be conducting normal business.
And for this year, the Commerce Ministry expects the average cost of importing a barrel of crude oil to rise about 25 % to $ 34.4, up from $ 27.5 in 2003.

Source: Emirates News Agency