Fuel Prices Soar, South Korea's Inflation Hits 3.1 Percent

Lee Doo-won, a senior official at the Ministry of Data and Statistics, speaks at a press conference in Sejong City, central South Korea, June 2, 2026. (Yonhap)

JAKARTA - Energy prices are once again the cause of inflation. South Korea recorded a 3.1 percent increase in consumer prices in May compared to the same period last year, after fuel prices jumped sharply due to the turmoil in the Middle East.

Yonhap reported on Tuesday, June 2, data from the Ministry of Data and Statistics showed that the increase was the fastest in 26 months. The figure is equivalent to the inflation rate in March 2024.

According to data quoted by Yonhap, the biggest pressure came from oil products. Prices jumped 24.2 percent and contributed 0.92 percentage points to the overall increase in inflation.

Gasoline prices rose 23.1 percent. Solar is even sharper, jumping 33.3 percent. This increase in oil products is the highest since 2022, when world energy prices were shaken at the start of the Russian invasion of Ukraine.

Global energy supplies are also disrupted after the war between the United States and Iran. Shipments through the Strait of Hormuz, an important route for world oil trade, are stalled. South Korea is a country that is highly dependent on energy imports. Therefore, any shock in the oil line is quickly felt in domestic prices.

Industrial products prices rose 4.2 percent, mainly due to fuel. Service prices also increased 2.8 percent, driven by insurance costs.

The impact is felt even on plane tickets. Ticket prices jumped 33.5 percent due to an increase in additional fuel costs, namely extra costs on tickets due to rising jet fuel prices. This is the highest increase since the government began recording the data in 1995.

Food prices are also not completely tame. Agricultural and fishery products rose 2.2 percent, mainly due to rice and pork. The government said that the supply of agricultural products had decreased due to high temperatures recently.

However, there is a little news that is not too bad. Processed food prices only rose 0.8 percent in May, slowing from the 1 percent increase in April. The decline in the price of cooking oil and snacks also slowed the rate of increase.

"Considering the slowing rise in processed food prices, as well as the rate of increase in agricultural, livestock, and fishery products, it seems that the impact of the Middle East war has not spread to other sectors," said Lee Doo-won, a senior official at the Ministry of Data and Statistics, quoted by Yonhap.

Core inflation, which is inflation that does not include volatile food and energy prices, rose 2.5 percent year-on-year. This is the highest level since February 2024.

Lee said the direction of inflation next month would depend heavily on the development of the war in the Middle East and the movement of world crude oil prices.

In a separate report, South Korea's Ministry of Finance and Economy said the government would seek to curb the impact of the Middle East war on consumer prices.

The government will also take early steps to keep the cost of living, especially in the face of the impact of summer heat and heavy rains on the supply of goods.

The Bank of Korea expects consumer prices in June to still rise at a similar pace, as global crude oil prices rise.

For countries that rely on energy imports, South Korea's case shows how quickly the world's oil turmoil enters the price of goods, transportation costs, and the cost of living for citizens.

South Korea is heavily dependent on energy imports. Therefore, the pressure of world oil prices quickly spread to the price of goods, transportation costs, and the cost of living for residents.