Seoul: South Korea's consumer prices escalated at their quickest rate in 21 months in April, primarily due to escalating fuel prices, as evidenced by government data released on Wednesday. Consumer prices, a crucial measure of inflation, rose by 2.6 percent compared to the previous year, marking the largest annual increase since July 2024, when inflation similarly rose by 2.6 percent.
According to Yonhap News Agency, this recent surge was fueled by a significant increase in petroleum product prices, which soared by 21.9 percent from the previous year. This marks the most considerable rise since July 2022. Specifically, diesel and gasoline prices saw substantial increases of 30.8 percent and 21.1 percent on-year, respectively, also marking the sharpest on-year rise since July 2022.
The surge in global oil prices is attributed to the effective closure of the Strait of Hormuz following U.S.-Israeli strikes on Iran in late February, which disrupted global oil supplies. With South Korea's heavy reliance on energy imports, the effects have been pronounced. The Ministry of Data and Statistics highlighted that while temporary price caps on fuel products were implemented to curb price hikes due to the Middle East conflict, these measures only partially offset the rise.
Lee Doo-won, a ministry official, noted, "The measures had a moderating effect not only on fuel prices but also on overall consumer inflation. However, fuel prices may see a slight increase in May." In addition, industrial product prices increased by 3.8 percent, the fastest growth since February 2023, driven by a rise in insurance costs affecting service prices, which increased by 2.4 percent.
Furthermore, higher oil prices have led to increased fuel surcharges, significantly raising international airfare costs. The increase in international flight costs accelerated to 15.9 percent in April from 0.8 percent the previous month. Domestic airfares, which rose by 0.8 percent, are also expected to rise further in May, according to the ministry.
On the other hand, prices for agricultural, livestock, and fishery products fell by 0.5 percent, marking a second consecutive monthly decline, largely due to a 12.6 percent drop in vegetable prices amid favorable weather. Core inflation, excluding volatile food and energy prices, rose by 2.2 percent on-year last month, the ministry reported.