South Korea says it's considering energy vouchers, boosting coal and nuclear power

SEOUL - South Korea is considering providing additional energy vouchers to subsidize vulnerable households if rising global fuel prices in the wake of the Middle East crisis push up electricity costs, the government said on Friday.

Asia's fourth-largest economy is also preparing to boost nuclear and coal-fired power generation in the event that oil prices remain high and liquefied natural gas (LNG) supplies are disrupted.

"The government will take all necessary measures to minimize the burden on the people, such as stabilizing energy supply and demand, price management, and supporting people vulnerable (to rising energy costs)," Industry Minister Kim Jung-kwan said on Friday.

South Korea relies almost totally on imports for its energy, buying about 70% of its oil and 20% of its LNG from the Middle East, according to Korea International Trade Association data.

To reduce dependence on LNG, the Climate and Energy Ministry said this week it would accelerate the restart of nuclear reactors under maintenance, with two units expected to come back online as soon as March and four more by mid-May.

It also said coal-fired power output could be flexibly increased during periods when the impact on air quality from fine dust was low, if LNG supply shortfalls materialized.

Capping fuel price

The government is considering expanding the current budget for energy vouchers for low-income and other vulnerable groups in a supplementary budget currently being drafted, a government official told Reuters.

South Korea already has in place last year's energy voucher budget of about 500 billion won ($334.32 million), valid through May, and another roughly 500 billion won in this year's energy voucher budget.

The government will monitor the funds and consider additional support, the official said.

South Korea began capping domestic fuel prices at a maximum wholesale price for gasoline at 1,724 won ($1.15) per liter on Friday to combat the rise in energy costs.

"For people like us, truck drivers, we’d obviously like prices to come down even more," said Park Jong-se, 68, who has been a cargo truck driver for more than 30 years.

"Since fuel is imported, I’m not sure how much the government support will actually help.... Because of the fuel prices, truck drivers end up checking prices at every gas station. It’s really tough." — Reuters