February 24, 2011 / 3:28 AM / in 7 years

S.Korea to tighten energy policy amid Middle East crisis

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SEOUL, Feb 24 (Reuters) - South Korean President Lee Myung-bak on Thursday called for a tighter national energy policy to counter the impact of higher prices stemming from political instability in the Middle East.

Lee discussed at a meeting with senior energy and national security officials ways for the country to diversify crude oil import sources and ordered a cutback in possible wasteful uses of energy, his office said in a statement.

“We must analyse the situation and developments in the Middle East and implement strategies in response,” Lee said.

South Korea wants to keep consumer inflation around 3 percent this year as it battles rises in crude oil and produce prices and housing rents, and has put a freeze on utility rate increases announced this month.

Lee’s government has been working on policy measures to stem inflation as campaigning is set to get under way for by-elections in April that will be a crucial gauge of support for him and his Grand National Party before parliamentary and presidential votes next year.

Economic policy is likely to figure highly on the political agenda ahead of the elections.

Consumer prices jumped 4.1 percent in January from a year earlier, versus a 3.5 percent rise in December.

Energy officials said they would be running daily checks of oil inventories and pursuing diversification of sources of crude oil, currently heavily concentrated in the Middle East.

The energy ministry said it would discuss possible releases of government crude inventory and raising stockpiles for private refiners at a meeting of energy officials and industry executives later on Thursday.

South Korea is the world’s No. 5 crude oil buyer and No. 2 liquefied natural gas importer and has boosted spending to acquire assets and develop oil and gas reserves, with a heavy focus so far on the Middle East and the Arctic. (Reporting by Jack Kim; Editing by Jonathan Hopfner)

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