By Seo Jee-yeon
Staff Reporter

The government on Wednesday announced it will lower tariffs and surtaxes on imported crude oil and oil-based products from Friday as Dubai brand oil prices hits a 41-month high of more than $32 per barrel.

To ease inflationary pressure linked to surging crude oil prices, tariffs for crude oil will fall from 3 percent to 1 percent, and other oil-based products such as gasoline, diesel and kerosene from 7 percent to 5 percent.

At Tuesday’s closing, the spot price of Dubai oil soared to $32.73 per barrel, 39 cents higher than Wednesday’s due to intensifying conflicts in oil-rich Iraq and political instability in the Middle East, the Korea National Oil Corp. (KNOC) said.

The oil prices are the highest since Nov. 13 in 2000.

The Dubai oil price hike directly affects consumer oil prices as about 80 percent of the country’s oil comes from the Middle East.

Brent North Sea crude on Wednesday also increased 60 cents to $34.42, the KNOC added.

As part of efforts to stabilize prices, the government also lowered the surtax for oil imports from 14 won to 8 won per liter.

Those two government measures will have an effect on lowering 11 won in oil prices per liter at gas stations, the Ministry of Finance and Economy (MOFE) officials said.

The measures are also expected to help lower consumer prices by 0.05 percentage point.

MOFE Assistant Minister for Tax Affairs Lee Jong-kyu said that the new rates for crude oil and oil prices will be maintained for the time being.

The government also said they have no plans to compel car owners not to drive one out of every 10 days.

This would only happen if there were problems with supply, officials said.

The MOFE expects oil prices will remain unstable in the near future because of possible continued instability in the Middle East.

jyseo@koreatimes.co.kr