Seoul:<Text>
Industry Minister Kim Jung-kwan stated that South Korea's newly implemented fuel price cap system is already having a stabilizing effect on fuel prices, less than a day after its introduction. The announcement followed a meeting with officials from oil refineries, gas stations, and the Korea National Oil Corp., convened to assess the domestic energy market's response to the cap system.
According to Yonhap News Agency, the temporary cap system, which came into effect at midnight on Thursday, aims to address rising fuel costs and alleviate consumer burdens. It sets maximum prices for oil refinery products supplied to gas stations and distributors: 1,724 won (US$1.16) per liter for regular gasoline, 1,713 won per liter for diesel, and 1,320 won per liter for lamp oil. The price caps will be reassessed bi-weekly in line with international oil price changes until the government deems domestic fuel prices stable enough to end the system.
Minister Kim r eported that immediate price reductions are evident, with both gas stations and oil refineries showing strong cooperation. He urged gas stations to support the initiative, emphasizing that the ceilings apply to refiners' supply prices.
In addition to the initial meeting, Kim led an intergovernmental task force meeting to address unfair market practices related to fuel pricing. He emphasized the system's role as a protective measure for the national economy during crisis periods and promised strict actions against exploitation attempts like hoarding and price gouging. The task force has already conducted over 800 inspections, uncovering 20 cases of illegal oil product distribution.
Regarding the petrochemical industry's challenges in securing naphtha amid Middle Eastern tensions, Kim mentioned that the government might limit exports of domestically produced items and consider releasing naphtha reserves if the strategic oil reserves are accessed. Companies like Yeochun NCC Co ., a major ethylene producer, have hinted at potential "force majeure" due to supply disruptions, as over half of South Korea's naphtha imports transit through the now-closed Strait of Hormuz.
Furthermore, the government is exploring tax measures to stabilize energy prices and plans to offer energy vouchers to vulnerable households, providing additional support during this period of economic uncertainty.
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