A price board at a gas station displays regular gasoline at 1,796 won per liter (around US$1.20) in Incheon, South Korea, 13 March 2026. The government implemented a temporary fuel price cap system the same day to ease cost burdens amid supply concerns linked to the Middle East crisis. File. Photo by YONHAP / EPA
March 26 (Asia Today) — South Korea will raise its second round of fuel price caps starting at midnight Friday, pushing expected retail gasoline prices above 2,000 won per liter (about $1.50).
The government set the new ceiling for gasoline at 1,934 won ($1.45) per liter, up 210 won from the first round. Diesel will be capped at 1,923 won ($1.44) and kerosene at 1,530 won ($1.15).
Because refiners’ wholesale supply prices have already moved into the 1,900-won range, officials expect retail prices at gas stations to settle in the low 2,000-won range, or roughly $1.50 to $1.60 per liter.
The first round of price caps, introduced March 13, focused on shielding consumers from a surge in global oil prices. The second round reflects a shift in policy, allowing some price increases while trying to prevent excessive costs from being passed on to households as the crisis drags on.
The Ministry of Trade, Industry and Energy said the revised caps incorporate international oil price movements while factoring in inflation and household impact.
Yang Ki-wook, a senior official at the ministry, said the government did not apply global prices mechanically.
“We considered the broader impact on people’s livelihoods,” Yang said.
Based on the first round, when the nationwide average gasoline price reached about 1,810 won ($1.36), officials believe prices will now move into the low 2,000-won range.
The ministry said it may take two to three days for the new caps to be reflected at gas stations, as most retailers still hold inventory purchased under earlier pricing.
Stations that raise prices immediately could face scrutiny, Yang said, noting most hold five days to two weeks of supply.
The government estimates the price cap system lowers fuel costs by about 200 to 500 won per liter compared with a scenario without intervention.
Officials also rejected concerns that the policy conflicts with demand-control measures such as vehicle rotation systems. They said the second phase is intended to balance two goals: encouraging reduced consumption while preventing excessive price spikes.
Separately, the government extended fuel tax cuts through the end of May and increased the reduction rates. The gasoline tax cut was raised from 7% to 15%, and diesel from 10% to 25%.
Under the revised rates, fuel taxes now stand at 698 won ($0.52) per liter for gasoline and 436 won ($0.33) for diesel, down 65 won and 87 won, respectively.
Officials said the tax cuts were factored into the new price caps, resulting in effective reductions of about 200 won for gasoline and about 500 won for diesel and kerosene compared with market-based pricing.
The second round of price caps will remain in effect for about two weeks, through April 9.
— Reported by Asia Today; translated by UPI
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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260326010008302