Fuel Prices Drop as Korea Implements Oil Price Cap

Fuel prices at gas stations across South Korea showed a marked decline on the first day of the government's oil price cap system, which sets maximum retail prices for petroleum products. However, many stations in central Seoul and some metropolitan areas still charged over 2,000 won per liter of gasoline, suggesting consumers may need two to three days to feel the full impact.

Outer areas of Gyeonggi Province saw clear price drops on May 13. A gas station in Jangan-gu, Suwon, Gyeonggi Province, was selling gasoline at 1,765 won per liter, with diesel at 1,748 won. A budget gas station in Wonmi-gu, Bucheon, Gyeonggi Province, offered gasoline at 1,757 won and diesel at 1,789 won. These stations, among the cheapest in their areas, were crowded with customers.

In Seoul, prices fell mainly in areas outside central business districts, such as Gwanak-gu and Yeongdeungpo-gu. A station in Singil 5-dong, Yeongdeungpo-gu, priced gasoline at 1,789 won, while another in Gwanak-gu charged 1,799 won.

"Prices dropped enough that I can feel the effect in just one day," said a Gwanak-gu resident surnamed Kim who came to refuel. "I was scared every time I filled up after the U.S.-Iran war broke out, but now I can breathe a little easier."

Another customer said, "Until yesterday, there were plenty of places charging over 2,000 won per liter, so I'm relieved prices are stabilizing with the price cap," but added, "Prices still vary wildly between stations, so I have to search for information and wait in line for 30 minutes to save 100 or 200 won."

National average prices dropped significantly on the first day of the price cap. According to Opinet, a fuel price information platform operated by the Korea National Oil Corporation, the national average gasoline price stood at 1,872.62 won per liter as of 2:30 p.m., down 26.16 won from the previous day. Compared to May 10, when prices peaked at 1,906.95 won per liter, the decline was 34.33 won. Diesel also fell 34.83 won to 1,884.14 won per liter.

However, major urban areas like Jongno and Gangnam in Seoul have yet to reflect the new prices, limiting the price cap's visible effect. A gas station near Seoul Station in Jung-gu was still charging 2,396 won per liter for gasoline.

Industry officials expect it will take two to three days for prices to be reflected in central metropolitan areas. The government's price cap applies to refiners' supply prices, so while company-owned stations can adjust quickly, independent operators must first sell through inventory acquired at higher prices after the war began.

An independent station operator surnamed Kim, who stocked 28,000 liters of gasoline and 12,000 liters of diesel after the war, explained, "Independent stations inevitably face a time lag in retail prices depending on inventory. The pre-stocked fuel is settled afterward, so we need to clear out the expensive inventory before we can lower prices."

The government plans to actively respond to stations that continue charging high prices. It will reset maximum prices every two weeks. A cross-ministry joint inspection team has been launched and conducted intensive crackdowns on gas stations at risk of illegal petroleum distribution since May 6, uncovering 20 violations. The Korea Coast Guard has also launched special enforcement against illegal petroleum distribution, including undocumented transactions and fraudulent tax-exempt fuel sales taking advantage of rising oil prices.