The South Korean government will cap wholesale prices of gasoline and diesel supplied to gas stations nationwide at the 1,700-won-per-liter level through the 26th. Considering that gas station distribution costs including margins run around 4%, actual retail prices consumers pay are expected to stay in the low 1,800-won range.
The government announced the petroleum price stabilization measures at a "Livelihood Price Special Management Ministerial Task Force" meeting held at the Seoul Government Complex on the 12th.
To counter surging international oil prices triggered by Iran's Hormuz Strait blockade, the government will implement a maximum price system starting midnight on the 13th. Maximum prices will be updated biweekly, calculated by multiplying refiners' weekly average supply prices by the Singapore MOPS (Mean of Platts Singapore) fluctuation rate, then adding various taxes. Initial ceiling prices are set at 1,724 won per liter for gasoline, 1,713 won for diesel, and 1,320 won for kerosene.
Recent average supply prices to gas stations were 1,830 won for gasoline, 1,930 won for diesel, and 1,730 won for kerosene—representing reductions of more than 200 won. The price caps also resolve the anomaly of diesel prices exceeding gasoline prices. The government plans to determine when to end the system after monitoring international oil price trends.
The government also designated 23 items closely tied to daily life—from rice and pork to apartment maintenance fees—as "special management targets" for intensive monitoring. Cooking oil and instant noodle manufacturers have agreed to reduce prices on major products by up to 14.6% starting in April.
Meanwhile, the Bank of Korea warned that prolonged implementation of petroleum price caps could produce side effects such as excess demand. The central bank stated, "The longer the system remains in place, the greater the risk of side effects including excess demand," expressing the view that it should be limited to a short period.
