According to the Ministry of Knowledge Economy, Seoul planned to boost production of high efficient cars by strengthening regulation on fuel economy of cars and greenhouse gas, while offering financial support for the development of high efficient vehicles.

Fuel efficiency for locally made cars averaged 15.5 kilometers per liter at present. The government planned to raise this to 17 kilometers by 2015 and to the Japanese target level of 20.3 kilometers by 2020. Seoul also planned to provide 120 billion won (102 million U.S. dollars) this year in financial support for developing high-efficient car engines and electricity-powered vehicles.

The government will extend tax exemption given to buyers for hybrid-powered cars and small vehicles, while introducing measures to offer financial support for large commercial car owners who sell their old vehicles for new models.

In addition, the government planned to increase tax deduction by 1 million won (852.88 U.S. dollars) for people that use public transportation and make payments through credit cards or transportation cards.

The ministry said that those measures will cut the country's oil consumption by 26 million barrels until 2015, sending the dependence on oil to less than 33 percent of all energy consumption in 2015 from the expected level of 37.5 percent in 2012.

The measures came after global oil prices stayed at a high level amid concerns over the geopolitical risks in the Middle East. Dubai crude, South Korea's benchmark, averaged 109 U.S. dollars a barrel last week, while the nation's gasoline prices averaged 2, 042 won (1.74 U.S. dollar) per liter last week.

Despite the high oil prices, South Korea's gasoline and diesel consumption grew 3.1 percent on-year in the first quarter, when people in the United States and Europe cut back on fuel by 2.6 percent and 2.1 percent respectively.

The Organization for Economic Cooperation and Development (OECD) picked higher oil prices as a major threat to the South Korean economy as the country is the world's fifth largest oil importer. South Korea's oil imports amounted to 26.9 billion U.S. dollars in the first quarter, higher than 22.6 billion U.S. dollars a year earlier.