4.2 trillion won reserve reserve criteria revealed... “Prepare for the possibility of oil prices reaching $150”

4.2 trillion won reserve reserve criteria revealed... “Prepare for the possibility of oil prices reaching $150”

Supreme Settlement Committee to hold 6 meetings starting in July

(Seoul = Yonhap News) Reporter Kim Min-ji = It was found that the government calculated 1.5 trillion won per 100 won gap in oil prices when setting up a reserve fund for oil refinery loss compensation due to the implementation of the maximum oil price system.

According to data submitted by the Ministry of Trade, Industry and Energy on the 4th, People Power Party lawmaker Cho Ji-yeon, a member of the National Assembly's Trade, Industry, Energy, Small and Medium Venture Business Committee, announced that the Ministry of Trade, Industry and Energy calculated KRW 1.5 trillion per KRW 100 gap as the budget for compensation for oil refinery losses due to the maximum oil price system.

The explanation is that when the difference between the estimated price if the maximum price system had not been implemented and the maximum price set by the government was 100 won, it was judged that 1.5 trillion won would be needed to compensate for the oil refinery's losses. The Ministry of Trade, Industry and Energy added that it was assumed that the gap would not be more than 200 won.

Previously, on March 13, the government implemented a maximum oil price system that placed a cap on oil refineries' supply prices to gas stations and set up a reserve fund of 4.2 trillion won to compensate for the resulting losses of oil refineries.

Regarding the reason for calculating 4.2 trillion won, the Ministry of Trade, Industry and Energy explained, "We estimated 2.76 trillion won based on costs for the second and third quarters (until September), but we allocated an additional 1.5 trillion won due to the National Assembly Budget Office's opinion that we should prepare for the possibility that crude oil prices may soar to $150."

The Korea Energy Economic Institute reported that the Korea Energy Economic Research Institute estimated the cost calculation standard used when setting up the reserve fund by running various simulations.

By the 30th of last month, the Ministry of Trade, Industry and Energy had received data from each oil refinery on the costs and requirements for each company for losses incurred from March 13 to June 30. Based on this, we plan to establish common standards through the Supreme Settlement Committee and finalize the settlement price at the end of November, taking into account the cost and appropriate margin for each oil refinery.

It was also explained that loss compensation will be paid to the oil refinery immediately afterward, and once the settlement price is confirmed, quarterly settlements after July will proceed sequentially without disruption.

According to the Ministry of Trade, Industry and Energy's response, the Supreme Settlement Committee has been held a total of six times since last July.

Meanwhile, the government set the 10th highest oil price to be applied for four weeks from the 19th of last month, the same as the 9th price, at 1,784 won per liter for gasoline, 1,773 won for diesel, and 1,380 won for kerosene.