Seoul: Finance Minister Koo Yun-cheol announced on Monday that the temporary price caps on fuel products will remain in effect as the government continues to monitor ongoing instability in the Middle East. The decision comes in the wake of heightened tensions following U.S.-Israeli strikes on Iran, which led to the effective closure of the Strait of Hormuz in late February.
According to Yonhap News Agency, the price system, introduced in mid-March to combat inflation driven by surging global oil prices, is reviewed every two weeks. Koo stated that the government plans to maintain the measure until the Middle Eastern situation stabilizes. The latest adjustment, announced last Thursday, saw the government freeze fuel price ceilings for the third consecutive review period.
When questioned about the potential duration of the price cap system, Koo assured that authorities would closely monitor global oil market conditions, emphasizing the importance of observing oil price trends. He added that South Korea has managed inflationary pressures more effectively than many other countries, with consumer prices rising 2.6 percent in April due to higher fuel costs linked to the conflict.
Despite these challenges, Koo expressed optimism about the South Korean economy's growth prospects, predicting an expansion of over 2 percent in 2026, bolstered by a robust first quarter GDP growth and positive forecasts from global investment banks. The latest data revealed a 1.7 percent GDP growth in the first quarter, the strongest since the third quarter of 2020, and nearly double the central bank's forecast.
Moreover, Koo addressed the labor-management dispute at Samsung Electronics Co., urging both sides to reach an amicable settlement to avoid disrupting the country's semiconductor industry. The unionized workers have announced plans for a general strike starting May 21.
In anticipation of U.S. Treasury Secretary Scott Bessent's upcoming visit, Koo noted that no separate meetings have been scheduled.