SEOUL - South Korea said on Sunday it will hand out $10.2 billion to its lowest-income citizens over the next year to offset the skyrocketing price of oil, emulating Asian neighbours in targeting subsidies at the poor.

Following are main elements of the measures announced by Prime Minister Han Seung-soo at a news conference:

WHY MEASURES ARE NECESSARY

- Oil prices have exceeded the level of the previous oil shock in the 1970-80s, calculated at around $104 a barrel at today's value after adjustment for inflation.

- Soaring oil prices pose a threat to South Korea's economy already suffering from stalled domestic demand amid a slump in personal income.

- If this year's average oil price stands at $100 a barrel, South Korea's annual gross domestic product growth would lose up to 0.5 percentage point and annual consumer price growth would rise an additional 1.0 percentage point.

- At an average oil price of $100 a barrel, fuel and transport costs for the lowest-income households would rise to 17.2 percent of their income from 14.8 percent last year.

WHAT TO DO

- Low income earners, the poor self-employed, farmers, fishermen and the disabled will get 7.18 trillion won ($7 billion) in refunds, tax rebates or subsidies.

- State-owned electricity and gas suppliers to get 1.255 trillion won of subsidies to make up for losses incurred from frozen utility prices.

- Fishermen, industrial sectors, transport companies and public agencies to get 604 billion won in support of their projects aimed at improving energy efficiency.

- Alternative energy and energy recycling projects to get 354 billion won in financial support.

- Projects aimed at acquiring overseas energy supply sources to get 1.1 trillion won in financial support.

HOW PACKAGE WILL BE FUNDED

- The government has 4.9 trillion won in tax revenue surplus carried over from last year.

- The government expects tax revenue to increase by more than 5 trillion won over the next year from earlier estimates due to increased oil prices.