South Korea Implements Fuel Price Caps Amid Middle East Conflict
The South Korean government implemented a maximum fuel price system to curb surging oil costs and prevent unfair profits during the Middle East crisis.
The government of South Korea implemented a temporary fuel price cap system at midnight on Thursday to combat soaring oil prices triggered by conflict in the Middle East. This measure, the first of its kind in the country since 1997, limits the supply prices refiners charge distributors and gas stations rather than retail customer prices. Initial ceilings were set at 1,724 won per liter for regular gasoline, 1,713 won for diesel, and 1,320 won for kerosene.
Lee Jae Myung, President of South Korea, urged the public via X to report businesses violating these limits to prevent sellers from reaping unfair profits. To secure energy supplies, the government required refiners to release at least 90% of the monthly volumes released in March and April of the previous year and agreed to ship four million barrels of crude oil from the United Arab Emirates. The state will provide financial support to refiners incurring losses due to the cap.
Industry Minister Kim Jung-kwan reported immediate stabilization effects on Friday, with national gasoline prices dropping to 1,864.07 won per liter. An intergovernmental task force conducted 800 inspections, discovering 20 cases of illicit market activity. The government will adjust supply price limits every two weeks based on international prices and is considering restricting domestic naphtha exports and releasing strategic reserves due to disruptions in the Strait of Hormuz.
