Introduction#
South Korea's Industry Ministry has taken a significant step to control fuel prices by imposing temporary maximum supply prices on gasoline, diesel, and kerosene. This intervention is the strongest the country has seen in nearly 30 years, reminiscent of measures taken during the Asian Financial Crisis.
Price Caps on Fuel#
The government has set a cap on regular gasoline at 1,724 won per liter at the wholesale level. It's important to note that these price controls apply only to the prices that refiners charge and do not affect the prices consumers pay at gas stations. This approach aims to limit price fluctuations in the wholesale market while allowing gas stations to maintain their profit margins.
Duration and Future Adjustments#
The initial price cap will be in place for two weeks, until March 26. After this period, the government plans to reassess and adjust the price limits based on market conditions.
Measures Against Market Manipulation#
In addition to the price caps, the Finance Ministry has mandated that oil refiners must supply at least 90% of their fuel volume from the same period last year. This measure is intended to prevent artificial shortages in the market. Furthermore, the government has prohibited practices such as hoarding, withholding supplies, and favoritism in distribution to ensure fair access to fuel.