S.Korea plans response to oil price rise

SEOUL, June 4 (Reuters) - South Korea, the world's No.5 crude oil importer, plans to toughen auto fuel economy standards and raise electricity and gas fares, as recent sharp rebound in oil prices threatens to delay economic recovery and stoke inflation.

South Korea, also the world's 11th biggest energy consumer, will prepare a long-term energy savings plan by July to respond more promptly to any dramatic changes in global energy prices, its energy ministry said on Thursday.

"Any sharp move in crude oil prices can significantly deteriorate current account data and hit the economy hard, because energy purchases amount to around one-third of our total imports," the energy ministry said in a statement.

A 10 percent gain in oil prices tends to reduce the current account balance by $2 billion annually and gross domestic product by 0.2 percentage points, the ministry said, citing an analysis by a state-run economic research institute.

Oil CLc1 was trading at around $66 a barrel on Thursday after touching $68.68 on Monday, its highest since early November.

Historically South Korea's current account has turned to a deficit when average annual oil prices rose above $95 a barrel.

Detailed savings plans would include raising electricity and gas fares and investment in automotive technologies.

It will also seek to boost average auto fuel economy by 2015 to levels advanced economies are imposing from the current 11.2 km per litre.

Under new U.S. standards, U.S. passenger vehicles and light trucks must raise fuel efficiency by 5 percent yearly to an average of 35.5 miles per gallon (6.62 litres/100 kilometres) by 2016.

The South Korean government plans to spend 150 billion won ($121.7 million) to boost auto fuel economy over the next five years and the private sector also plans to invest up to 720 billion won over the same period. (Reporting by Miyoung Kim; Editing by Jonathan Hopfner)