"Additional Extension Needed for Tax Burden Payment in the Petrochemical Industry"

Energy Economics Institute Hosts '2020 Energy Policy Forum'
"Oil Demand to Peak and Decline Before 2030," Claims Raised
"US Shale Companies' Restructuring Causes Sharp Investment Drop," Observations Made

From the left, Angukheon, Team Leader of the Korea Petroleum Association; Seobyeonggi, Professor at Ulsan National Institute of Science and Technology (UNIST); Sim Jaewon, CEO of KOSPO Yeongnam Power; Heo Jeongseok, President of Ulsan College; Jeon Yeongdo, Chairman of Ulsan Chamber of Commerce and Industry; Jo Wongyeong, Deputy Mayor of Economic Affairs, Ulsan Metropolitan City; Jo Yongsung, President of the Korea Energy Economics Institute; Cha Donghyeong, President of Ulsan Technopark; Jo Hongrae, Vice President of Ulsan University; Lee Miyeong, Director of Ulsan Women and Family Development Institute; Hwang Jongseok, CEO of Gangwon Steel; Jang Subum, Team Leader of Korea National Oil Corporation. (Photo by Korea Energy Agency)

[Asia Economy Reporter Moon Chaeseok] There have been calls for the government to provide policy support such as additional tax payment deferrals to the refining industry to induce liquidity improvement.

An Gukheon, team leader of the Korea Petroleum Association, made this claim at the '2020 Energy Policy Forum' hosted by the Korea Energy Economics Institute on the 25th.

Team leader An stated, "Due to reduced demand from COVID-19 and the fact that not all production facilities are operating, refining margins have continuously worsened, and this year's business performance improvement is expected to be limited," adding, "It is necessary to provide additional deferrals for tax payments to the refining industry."

Professor Kim Hyunggeon of Kangwon National University, team leader Jang Subum of Korea National Oil Corporation, and Professor Seo Byungki of Ulsan National Institute of Science and Technology (UNIST), who also participated in the panel discussion with team leader An, conveyed similar messages.

Professor Kim explained, "The peak point of oil demand is likely to be brought forward from the previous 2030," citing "the global economic recession, deglobalization, and the spread of information technology (IT), which are expected to reduce demand for transportation fuels."

He diagnosed, "After the novel coronavirus disease (COVID-19), the global economy faces a persistent risk of prolonged recession due to worsening relations between the U.S. and China and deglobalization."

Team leader Jang said, "Investment in upstream oil industries such as oil development is decreasing, and as U.S. shale oil companies undergo restructuring and become larger, the scale of final investment decision (FID) approvals for new projects will sharply decline, and more than half of lease areas will be canceled," adding, "Due to the impact of COVID-19, the global energy transition is accelerating, and oil companies must make strategic decisions earlier than before."

Domestic refining companies such as SK Energy, Hyundai Oilbank, GS Caltex, and S-Oil recorded an operating loss of 3.75 trillion won due to the impact of demand reduction, worsening refining margins, and inventory losses caused by falling oil prices.

This content was produced with the assistance of AI translation services.