Oil prices are not likely to sharply rise down the road, given oil producing nations' output capacity and rising US bond yields, a senior government official said Friday.

First Vice Finance Minister Kim Yong-beom said the government will take actions to stabilize inflation, if needed, amid concerns that an uptrend in oil costs would exert upward pressure on prices amid an economic slowdown.

"A rise in oil prices could increase burdens on households and companies. But as the current hike in oil prices is backed by improving global demand, its negative impact would be offset by an increase in exports," Kim said at a meeting with senior government officials on inflation.

The country's overall inflationary pressure has remained subdued amid the COVID-19 pandemic. But recent increases in food and oil prices are spawning concerns that inflation may pick up amid economic slumps caused by the coronavirus outbreak.

Prices of Dubai crude, South Korea's benchmark, reached an average of $65.6 per barrel this month, higher than an average of $42.3 per barrel in 2020, according to the finance ministry.

The country's consumer prices grew at the fastest clip in one year in February due mainly to sharp gains in prices of agricultural and livestock products.

The ministry said the growth of consumer inflation is likely to temporarily pick up in the second quarter, affected by hikes in food and oil prices.

"The government will seek to stabilize public utility charges in the second quarter to minimize their impact on consumer prices," Kim said. (Yonhap)