Gasoline

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

March 8 (Asia Today) — Gasoline prices in South Korea are approaching 2,000 won per liter as rising global oil prices linked to tensions in the Middle East push fuel costs higher, prompting debate over additional government tax cuts.

According to the oil price monitoring system operated by the Korea National Oil Corporation, the nationwide average gasoline price stood at 1,889.40 won ($1.41) per liter as of Friday.

In Seoul, the average price reached 1,941.71 won ($1.45) per liter, nearing the psychologically significant 2,000 won ($1.49) level and increasing pressure on consumers.

Fuel prices typically reflect international oil market changes with a delay of about two to three weeks. However, the recent sharp increase has raised expectations that the government may expand existing fuel tax reductions.

The government has already extended temporary tax cuts through the end of April. Gasoline currently benefits from a 7% fuel tax reduction, while diesel and liquefied petroleum gas butane receive 10% reductions.

Fuel taxes are one of the government’s most direct tools to ease inflation, as adjustments can quickly influence consumer prices.

South Korea previously expanded fuel tax cuts during earlier energy price surges. In 2022, when oil prices spiked following the Russia-Ukraine war, the government increased the reduction rate from about 30% to the legal maximum of 37%.

Officials are reportedly reviewing whether additional tax reductions are needed. Because fuel tax rates are set by enforcement decree, the government can implement changes relatively quickly after approval at a Cabinet meeting.

Bae Jun-young of the conservative People Power Party said fuel tax cuts should be expanded to provide meaningful relief for consumers.

“If tensions in the Middle East persist, the government should also consider raising the ceiling on the flexible fuel tax rate,” Bae said.

— 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=20260309010002111