Seoul: The government has announced a continuation of the current price ceilings on fuel products for the fourth consecutive period. This decision comes in response to steady global crude prices and a stable supply of oil into the country.
According to Yonhap News Agency, the Ministry of Trade, Industry and Resources confirmed that the maximum prices for regular gasoline, diesel, and kerosene supplied to local gas stations will remain constant at 1,934 won (approximately US$1.3), 1,923 won, and 1,530 won per liter, respectively, over the next two weeks. This marks the fourth time in a row that the government has opted to keep the fuel price caps unchanged.
The ministry cited the absence of significant changes in global oil prices, which have hovered around US$100 per barrel. This stability is partly due to ongoing geopolitical tensions, notably the stalled peace talks between the United States and Iran. The government has also taken into account the rising inflationary pressures attributed to higher energy prices, which have been impacting the cost of living.
In April, consumer prices in South Korea rose by 2.6 percent compared to the previous year, marking the fastest increase in 21 months. Notably, petroleum product prices surged by 21.9 percent year-on-year, the sharpest hike since July 2022.
In response to moderated volatility in global oil prices, partly due to the prolonged Middle East crisis, the government has decided to extend the price cap period from two weeks to four weeks. The price ceiling system, introduced in mid-March, aims to stabilize domestic fuel prices amidst global market fluctuations triggered by the closure of the Strait of Hormuz.
Yang Ghi-wuk, Deputy Minister for Trade, Industry and Resources Security, emphasized that South Korea's oil supply remains relatively stable, with approximately 85 percent of pre-Iran conflict supplies secured for use until July. The country has secured 78.5 million barrels for May, which equates to about 90 percent of the average pre-war oil supply for the month. Additional supplies from the United Arab Emirates, Kazakhstan, Saudi Arabia, and Oman, secured through diplomatic efforts, are arriving as expected.
South Korea has amassed a total of 300 million barrels of alternative oil supplies from these nations. While concerns persist regarding potential supply disruptions in August if the Middle East crisis remains unresolved, Yang stated that the government will continue to monitor the situation closely.
Yang also addressed the recent agreement between South Korea and Japan to establish a crude oil swap system. He stated that the government is working to develop the details of the agreement to ensure mutual benefits, highlighting Japan's larger oil reserves and storage capacity alongside Korea's advanced refining capabilities.