caps

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

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260326010008302

March 12 (Asia Today) — South Korea will impose a temporary price cap on petroleum products starting Friday, setting the first ceiling for gasoline at 1,724 won ($1.29) per liter as the government moves to curb surging fuel prices.

The Ministry of Trade, Industry and Energy said Thursday the “petroleum product maximum price system” will take effect at midnight and apply to fuel prices supplied by refiners to gas stations and distributors.

The first price caps are set at 1,724 won ($1.29) per liter for gasoline, 1,713 won ($1.28) for automotive diesel and 1,320 won ($0.99) for kerosene.

The measure will remain in place for two weeks through March 26 and will be reviewed every two weeks based on fluctuations in global petroleum product prices.

The government said the caps are significantly lower than the average supply prices submitted by refiners on Tuesday. At that time gasoline averaged 1,833 won ($1.37) per liter, diesel 1,931 won ($1.45) and kerosene 1,728 won ($1.30).

Compared with those levels the new caps are lower by 109 won for gasoline, 218 won for diesel and 408 won for kerosene.

Officials said the policy aims to quickly slow the recent surge in oil prices and ease instability in the fuel market.

The price cap will apply only to wholesale supply prices set by refiners rather than the retail prices at individual gas stations. Officials expect pump prices to gradually decline as stations adjust prices once lower-cost fuel enters inventories.

Price changes typically appear two to three days after new supply prices take effect, depending on station inventories, the ministry said.

If refiners incur losses because of the price caps the government plans to compensate them through a post-settlement system. Refiners will submit loss estimates which will be verified through accounting reviews before quarterly compensation payments are made.

Minister of Trade, Industry and Energy Kim Jeong-gwan said the policy would allow limited price adjustments in line with international fuel price trends while preventing excessive increases that diverge from global markets.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260312010003859