Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol said the government will extend the ban on hoarding petroleum products by two months until July to prevent sellers from exploiting the oil price ceiling system to avoid sales or stockpile supplies.
Koo chaired the eighth meeting of the task force of ministers on special management of consumer prices at the Government Complex in Sejong on Wednesday. "The fifth price ceiling, which will take effect at midnight on May 8, will be announced at 7 p.m. today after discussions at this meeting, as before, taking into account international oil price trends, petroleum consumption, and the burden on public finances and livelihoods," he said.
The government focused on blocking misconduct such as refusing to sell under the pretext of the price ceiling system. "To prevent misconduct such as refusing to sell under the guise of the price cap system, the notice banning the hoarding of petroleum products will be extended by two months until July," Koo said. As a result, the application deadline for the petroleum hoarding ban, initially set for the 12th of this month, will be extended to July 12.
Enforcement measures will also be strengthened. To enhance the effectiveness of price stabilization measures such as the hoarding ban, the government plans to introduce penalty surcharges and actively utilize reward systems. The move reflects the view that the current hoarding ban alone has limits in preventing shipment delays, refusal to sell, and volume manipulation that may arise in the course of implementing the price cap system.
The government assessed that high oil price response measures, including the oil price ceiling system and the fuel tax cut, have been effective in easing inflationary pressure. The Ministry of Economy and Finance said the consumer price index rose 2.6 percent in April, as price stabilization effects from the implementation of the oil price ceiling system and increased agricultural shipments offset the impact of the Middle East war. High oil price response measures, including the oil price ceiling and the fuel tax cut, were estimated to have lowered April's consumer price growth by about 1.2 percentage points.
Beyond petroleum products, the government will also conduct daily monitoring of livelihood-related items such as agricultural products, processed foods, and daily necessities. In cooperation with the food industry, it will hold discount events covering some 4,300 items during the month of May.
Follow-up measures to improve tariff quotas will also be pursued. The government said a joint inter-ministerial review of the entire tariff quota distribution chain found that prices of imported fruits and seafood have fallen significantly. At major discount stores, price changes before and after the application of tariff quotas were -20 percent for mangoes, -11 percent for pineapples, -4 percent for bananas, and -3 percent for frozen mackerel.
To ensure that tariff quota reductions are properly reflected in consumer prices, the government plans to revise the Customs Act to impose additional taxes on delayed import declarations and to introduce orders for release from bonded areas. An integrated management system dedicated to overseeing agricultural and livestock products subject to tariff quotas will also be established within this year.
Countermeasures against supply chain instability stemming from the Middle East war were also discussed. The government will tighten reviews of export-restricted items such as petroleum products and naphtha while supporting expedited customs clearance and diversification of import sources, taking into account the opinions of export and import companies. The government also announced plans to secure up to 33 million barrels of crude oil annually by simplifying procedures to apply the free trade agreement (FTA) preferential tariff rate to Canadian crude.
Measures to stabilize the supply of medical products are also being pursued in parallel. The government will give top priority in raw material supply to manufacturers of medical products such as intravenous fluid packaging, syringes, and medication bottles. For syringes, the government will respond to stockpiling through special crackdowns on hoarding and prioritize the supply of 970,000 units to essential fields such as hemodialysis clinics. The average health insurance reimbursement rate for medical materials will also be raised by 2 percent to reflect the rise in the exchange rate.
