South Korea Holds Down Fuel Prices, Petrol Stations Asked to Follow Market

South Korea is trying to hold back rising fuel prices amid the Middle East crisis. The government uses a price cap and asks gas stations to help keep the fuel market stable.

Yonhap quoted Tuesday, May 19, reporting that South Korean Industry Minister Kim Jung-kwan on Tuesday appreciated a number of gas stations that were considered to help stabilize fuel prices in the country.

Kim met with representatives of low-cost gas stations selected by a community group monitoring the energy market. The meeting was held to encourage gas station managers to continue efforts to stabilize prices, as well as to hear their difficulties in implementing the upper limit policy on fuel prices.

The price limit policy has been implemented since mid-March. This step was taken after global oil prices rose due to the Middle East crisis.

According to the South Korean Ministry of Trade, Industry, and Resources, the increase in fuel prices in the country is relatively smaller than in some other countries.

As of Tuesday at 09.00, the average price of gasoline at South Korean gas stations is around 2,011 won or 1.34 US dollars per liter. The average price of diesel is in the range of 2,006 won per liter.

For the past six weeks, the government has frozen the upper limit of gasoline, diesel, and kerosene prices. The maximum price of regular gasoline supplied by local oil refining companies to gas stations is held at 1,934 won per liter. Solar is pegged at 1,923 won per liter. Kerosene 1,530 won per liter.

This figure is important because the increase in global oil prices usually quickly spreads to transportation costs, production costs, and commodity prices. Therefore, controlling fuel prices is an issue that directly touches consumers.

The ministry said that the price of solar in South Korea rose 26 percent compared to before the US-Israeli war broke out at the end of February. In the same period, the price of solar in the United States rose 44 percent, while the UK rose 37 percent.

"The government can manage domestic oil prices thanks to the efforts of gas stations," Kim said, as quoted by Yonhap.

Kim asked for continued cooperation between the government, the private sector, and the community until the Middle East crisis subsided.