President Lee: "Implement oil price cap quickly... considering direct support such as fuel tax cuts"

[Financial News] President Lee Jae-myung of South Korea said on the 9th, in connection with growing uncertainty surrounding the Middle East, "Since it is difficult to predict how the situation will unfold, the government must prepare preemptive response measures with a sense of urgency, keeping even the worst-case scenario in mind." He particularly called for additional steps to be prepared in advance not only by the government but also by the central bank. President Lee instructed officials to swiftly introduce an oil price cap system and to review measures such as expanding fuel tax cuts and providing direct support to fuel consumers.
President Lee made these remarks while presiding over an emergency economic review meeting on the Middle East situation at Cheong Wa Dae on the same day. He said, "As the crisis in the Middle East deepens, uncertainty in our internal and external economic environment is expanding significantly."
President Lee noted, "This is placing a considerable burden on our economy, which is highly dependent on global trade and energy imports from the Middle East." He continued, "I ask that you respond actively to the growing volatility in our financial and foreign exchange markets, which are the lifeblood of our economy. We must break away from past frameworks, identify even hidden risks, and carefully prepare response measures." He then stressed, "If necessary, we will actively expand the market stabilization program, which has been prepared at a scale of 100 trillion won."
President Lee went on, "We must also prepare additional measures preemptively at the level of the government and the central bank," adding, "In particular, we should strictly crack down on those who seek to exploit the difficult market environment for unjust gains, and I hope we can use this situation as an opportunity to push ahead swiftly with reform tasks aimed at improving the structure of our capital market."
He also made further requests regarding price stability. President Lee said, "Given the seriousness of the energy supply situation and household anxiety, we need extraordinary measures that match these circumstances. For petroleum products whose prices have recently risen excessively, we must introduce an oil price cap system quickly and implement it decisively." He added, "Since the burden of higher energy prices falls first, and most heavily, on ordinary people, we must prepare meticulous and effective measures." Following this, the Ministry of Trade, Industry and Resources (MOTIR) decided at the meeting to proceed within this week with the necessary procedures to implement the price cap.
In addition, Kim Yong-beom, Chief Presidential Secretary for Policy of the Republic of Korea, said in a briefing held at Chunchugwan that President Lee "instructed officials to conduct a broad and detailed review of ways to ease the burden on economic actors from rising fuel prices, including expanding the scope of fuel tax cuts and providing direct support to fuel consumers." President Lee also said, "In cooperation with our strategic partner countries, it would be desirable to swiftly identify alternative supply routes that do not pass through the Strait of Hormuz."
He further indicated that the government would take strong action against unfair trading practices. President Lee pointed out, "We must thoroughly crack down on illegal acts such as collusion between refiners and gas stations, hoarding, and stockpiling, and when violations occur, we need to impose strict sanctions amounting to several times the profits gained from such behavior."
President Lee said, "As I always say, every crisis is also an opportunity," adding, "The objective situation is not something only we are experiencing; everyone is going through it together. Ultimately, what determines what comes next is how we prepare for and respond to such circumstances."
He continued, "If this crisis in the Middle East becomes prolonged, the impact on the real economy could be significant. I ask you to prepare thoroughly and meticulously, using every possible tool," and appealed, "Please do your utmost to ensure that the temporary hardship experienced by our people is minimized."
cjk@fnnews.com Choi Jong-geun and Sung Seok-woo Reporter