South Korea has extended its fuel price caps for another four weeks
The South Korean government has left the price caps on gasoline, diesel fuel, and kerosene—which local refiners supply to gas stations—unchanged for another four weeks. The decision takes effect on Saturday, according to the country’s Ministry of Trade, Industry, and Energy.
The maximum price for gasoline will be 1,784 won per liter, for diesel fuel — 1,773 won, and for kerosene — 1,380 won. The government explained the extension of the price caps by citing a new rise in global oil prices amid uncertainty in the Middle East, although domestic supplies of petroleum products remain stable.
The price of Brent crude, which had fallen to $70 per barrel earlier in August, rose to the $90 range as of Thursday. Global prices for petroleum products have also begun to rise again.
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According to the ministry, South Korea secured crude oil and petroleum product supplies at approximately 100% of the volumes recorded a year earlier. The average retail price of gasoline in the country on Friday was 1,862 won per liter, compared to 1,867 won at the beginning of the month. The average price of diesel fuel during this period fell from 1,850 to 1,845 won per liter.
The government also took into account inflationary risks and additional pressure on household spending due to the heat wave and heavy rains. The consumer price index rose 2.8% year-over-year in July. The ministry estimated that without the price cap system, inflation could have reached 3.6%.
The restrictions were introduced in March due to concerns about fuel supplies amid tensions in the Middle East and are reviewed every four weeks. The ministry expects that determining compensation for oil refiners for losses resulting from the restrictions will take longer than initially anticipated. A committee to review compensation claims was formed last month; it is currently processing claims for losses incurred between March 13 and June 30.
