Gasoline prices at filling stations across South Korea turned sharply lower in the first week of the government's oil price cap. However, the delayed impact of surging international oil prices driven by Middle East tensions is expected to push prices back up in the near term.
According to data from the Korea National Oil Corporation's Opinet price information system on March 21, the national average gasoline price during the third week of March (15-19) fell 72.3 won from the previous week to 1,829.3 won per liter. Diesel prices dropped even more sharply, declining 96.5 won to 1,828.0 won per liter. The figures represent a noticeable price decrease in just the first week since the oil price cap took effect.
By region, Seoul maintained the highest prices but also saw significant declines. Gasoline prices in the capital fell 85.4 won to 1,865.4 won per liter. Daejeon recorded the lowest prices nationwide at 1,804.9 won, down 114.0 won, with regional price gaps persisting.
By brand, a clear gap remained between refinery-operated stations and budget filling stations. SK Energy stations averaged the highest at 1,835.3 won per liter, while budget stations were lowest at 1,807.5 won.
The price decline is attributed partly to the government's oil price cap influencing the market. However, international oil prices moved in the opposite direction. Dubai crude, the benchmark for Korean imports, surged $30.4 to $158.3 per barrel during the same period. International gasoline prices rose $14.3 to $142.7, while automotive diesel climbed $23.5 to $203.1.
The concern is that international price increases typically take two to three weeks to be reflected in domestic prices. The government has officially acknowledged the likelihood of price increases. Vice Minister of Trade, Industry and Energy Moon Shin-hak said in a recent radio interview, "Once the maximum price is announced, gas station prices will inevitably rise." He explained that while international product price increases may not be fully passed through, a significant portion will be reflected in domestic prices over time.
The government is scheduled to announce new maximum prices on March 27. This raises the possibility that the current downward trend may prove temporary rather than sustained.
Meanwhile, the government is also reviewing demand reduction measures alongside price controls. Energy conservation policies such as vehicle rationing based on license plate numbers are under discussion, with implementation timing to be determined through internal review. The government plans to distribute the burden by combining consumer conservation efforts, restraint on price increases by refiners, and fiscal support.