Tuesday, April 01, 2008

Prices of 52 Daily Necessities Under Control

Prices of 52 Daily Necessities Under Control

By Yoon Ja-young
Staff Reporter

Prices of ramyeon, gasoline and soju, and cram school tuition will be monitored and controlled by the government. Tariffs on oil products, including gasoline and diesel, will be cut to 1 percent from the current 3 percent.

The government also plans to allow huge retail outlets to operate gas stations under their own brands. The most crucial part of the government's measure is to stabilize the oil prices, which the Ministry of Strategy and Finance believes could be achieved by improving distribution channels.

The ministry said it has picked 52 daily necessities whose prices will be monitored and controlled to stabilize the livelihood of the working class amid global inflation pressure. The measure comes after President Lee Myung-bak's remarks that the prices of daily necessities should be controlled.

Included in the price control list are bus fares, telecommunication and apartment utility fees.

The government said the selection was based on the analysis of shopping and spending habits of households making 2.47 million won or less on average each month. They often buy such items, spending a considerable portion of their income. Consumer groups also gave advice in selecting the items.

It first chose 26 items that had increased in price by over 5 percent over the last year. Included in the list are wheat, ramyeon, Korean cabbage, radish, tofu, garlic, red pepper paste, vegetable oil, eggs, apples, snacks, detergent, gasoline, subway and bus fares, cram school tuition, shampoo and daycare center fees, among others.

Items including rice, soju and garbage bags, which saw a 2.5 percent price hike, and 16 items that had prices rise by less than 2.5 percent were also included in the price monitoring list. The National Statistical Office will monitor price changes of these 52 items every 10 days, and they will be released with consumer prices statistics every month, the ministry said.

``The anti-inflation policy of the new administration is different from direct price control of the 1970s or 1980s. Direct price regulation on the market is impossible and we don't plan to do it,'' the ministry said.

Instead, the government plans to promote competition in the market to stabilize prices. It also plans to freeze 17 public utility costs, including those for electricity and telephones.

The government also announced that 69 items including wheat and corn that will be tariff-free.

The ministry estimated the measures will cut consumer prices by 0.1 percent and import prices by 0.7 percent.


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