Seoul: Gov't announces adjusted price ceilings for fuel products to take effect midnight. The government announced Thursday adjusted price ceilings for domestic fuel products, which will take effect midnight, under a temporary fuel price cap system introduced to help ease cost burdens amid surging fuel prices caused by Mideast tensions.
According to Yonhap News Agency, the Ministry of Trade, Industry and Resources stated that maximum prices for regular gasoline, diesel, and lamp oil supplied to gas stations by local oil refineries have been raised to 1,934 won (US$1.28), 1,923 won, and 1,530 won per liter, respectively. The price caps will be effective for the next two weeks starting midnight.
These adjustments mark an increase from the initial price ceilings of 1,724 won per liter for regular gasoline, 1,713 won per liter for diesel, and 1,320 won per liter for lamp oil, which were implemented two weeks ago.
In addition to gasoline, diesel, and lamp oil, the government decided to include marine diesel in the list of fuel products subject to the price cap system to relieve cost burdens on fishermen, according to the ministry.
The government introduced the fuel price cap system two weeks ago on March 13 for the first time since 1997 in a bid to rein in domestic fuel prices that spiked after the United States and Israel launched airstrikes against Iran. This led to the effective closure of the Strait of Hormuz, a major global oil export route.
Under the price cap system, the government sets maximum prices for fuel products supplied by oil refineries to gas stations and retail distributors every two weeks, reflecting changes in international oil prices. With the adjusted ceilings, officials expect gas prices at the pump to climb to above 2,000 won per liter.
Yang Gi-uk, the head of the ministry's office of industry, trade, and resource security, mentioned that while it is difficult to predict prices at gas stations, final consumer prices are expected to be in the low 2,000 won range.
The government believes the revised price caps would effectively lower gasoline prices by about 200 won and diesel and kerosene prices by around 500 won, compared to without such controls. The government plans to lift the price ceiling when domestic fuel prices stabilize.
In addition to these measures, the government has been conducting an intensive crackdown on unfair market practices involving fuel products, including hoarding and price gouging, to prevent excessive fuel price hikes.
Yang noted that the government plans to closely monitor whether gas stations immediately hike prices when the adjusted price caps go into effect, considering that gas stations typically hold around five days to two weeks' worth of fuel.
Amid disruptions in crude oil supply from the Middle East, the government raised its national resource security crisis warning by a notch to Level 2 under the country's four-tier alert system last week. It also plans to release 22.46 million barrels of oil from strategic reserves next month under an agreement among International Energy Agency (IEA) members, according to Seoul officials.