The government has decided to implement an "oil maximum price system" within this week to respond to surging international oil prices caused by the Middle East crisis. The administration plans to prepare additional measures including expanded fuel tax cuts and direct consumer support, and will pursue a supplementary budget if necessary.
President Lee Jae-myung held an "Emergency Economic Review Meeting on the Middle East Situation" at the Blue House on the 9th. "The government must prepare preemptive countermeasures with utmost resolve, keeping the worst-case scenario in mind," he said. "Extraordinary measures are needed given the grave situation regarding energy supply and household anxiety."
As international oil prices surged sharply due to Middle East instability, the government decided to advance the implementation of the maximum price system. Kim Yong-beom, Chief of the Blue House Policy Office, stated, "We plan to implement the maximum price system within this week to prevent abnormal pricing of petroleum products." He added, "The Ministry of Trade, Industry and Energy will swiftly proceed with related procedures, including establishing official notices based on the Petroleum Business Act."
The maximum price system is a mechanism where the government sets a ceiling on petroleum product sales prices for a certain period to curb rapid price increases. Regarding pricing standards, Kim said, "We are basically designing this on a two-week cycle." He projected that "the first maximum price will be lower than the prices consumers currently face in the market."
The possibility of a supplementary budget emerged, considering fiscal requirements from implementing the maximum price system. Kim said, "Unexpected funding needs have suddenly arisen." He added, "Minimizing economic damage from this shock is our top priority, and we are now seriously considering additional fiscal injection."
Special measures were also discussed to address the financial and foreign exchange markets, which have seen increased volatility including sharp stock declines and currency depreciation. President Lee ordered, "If necessary, we should actively expand the market stabilization program, which has 100 trillion won prepared, and ready additional measures at the government and central bank level."
In preparation for a prolonged crisis, President Lee urged officials to "swiftly identify alternative supply routes that do not pass through the Strait of Hormuz." Kim explained, "If we exercise our right of first purchase on the 20 million barrels jointly stockpiled with oil-producing countries, we can take delivery."