Koo Yun-cheol: "Private sector may also face vehicle restrictions... If oil tops $120, crisis level will be raised to Stage 3"

The Financial News reported that on the 29th, Koo Yun-cheol, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, suggested that if international oil prices rise to around $120–130 per barrel, the government could extend the five-day rotation vehicle restriction to the private sector.
Appearing on the KBS Sunday Diagnosis program that morning, Koo said, "If the situation becomes more serious, we will have to move up to around Stage 3 (alert)," adding, "To ask for the public's cooperation in the private sector as well, we may need to introduce vehicle restrictions."
He stressed, "Once we reach Stage 3, crude oil prices in the market will rise much further, and at that point consumption will also have to be reduced." He noted that while the government is currently only asking the private sector to voluntarily follow the five-day rotation system, it could be made mandatory.
Regarding the conditions for raising the crisis level to Stage 3, Koo explained, "We have to look comprehensively at how serious the crisis is," adding, "Right now oil prices are fluctuating between $100 and $110, but if they move up to $120–130, we will consider that along with various other factors."
He also emphasized that the government is responding on multiple fronts to curb the burden on the public from rising oil prices. If necessary, there is room for additional cuts in fuel taxes, and to address a shortage of naphtha, which is essential for producing many industrial goods, the government can secure supplies from alternative countries and adjust the priority of sectors that use it.
Koo said the 25 trillion won supplementary budget bill now being drawn up by the government will focus support on four main areas: responding to high oil prices; supporting livelihoods for small business owners, the self-employed, logistics and delivery workers, and young people; industrial support; and stabilizing supply chains.
He stressed, "This will be funded with expected excess tax revenue, and it will absolutely not be financed by new borrowing." He added that, according to analysis by the Bank of Korea (BOK), the impact on inflation will not be significant.
On the won–dollar exchange rate, which has climbed above 1,500 won, Koo said, "Korea's foreign exchange reserves exceed about $420 billion, and our net external assets are around $900 billion," adding, "The kind of situation the public is worried about will not occur."
Regarding higher property holding taxes, he drew a line, saying, "Nothing has been decided yet, as we are still listening to a wide range of opinions." He also mentioned the tax reform package expected around July, amid speculation that it will include increases in property holding taxes to stabilize the real estate market.
Recently, President Lee Jae-myung shared on social networking service (SNS) an article comparing property holding taxes in major cities with those in Seoul. Koo said, "I understand his remarks as suggesting that, ultimately, we may also have to look at real estate-related taxes."
Koo assessed that the recent deterioration in youth employment has been influenced by companies' preference for experienced workers as well as demographic and industrial-structure changes. He announced, "The government will unveil Youth New Deal measures in April."
Koo added that the government will also push for a restructuring of tax expenditures as part of the July tax law revisions, saying, "As a rule, we should use this opportunity to abolish those tax expenditures that have become chronic."
chlee1@fnnews.com Lee Chang-hoon Reporter