South Korea will lower the fuel price limit after the world crude oil price weakened. The government also holds electricity and gas tariffs in the second half.
According to a Yonhap report quoted on Friday, June 26, South Korean Finance Minister Koo Yun-cheol conveyed the policy in a meeting with economic ministers on Friday.
The fuel price ceiling is the highest price set by the government. Koo said the policy remained in effect until consumer prices were truly stable. Details of the adjustment will be announced later.
South Korea implemented a fuel price cap in mid-March. The move was taken to hold down fuel prices domestically after supply chains were disrupted by the conflict in the Middle East.
"The government will adjust the emergency measures currently in effect gradually by carefully observing developments in the Middle East and the South Korean economy," Koo said.
Koo said external uncertainties had begun to ease after a memorandum of understanding between Washington and Tehran. However, the pressure on the people has not disappeared.
"Uncertainty still exists in the continued negotiations. The burden on the public, such as high consumer prices, a weak Korean won, high interest rates, and a slowing labor market, continues," Koo said.
The South Korean government is targeting inflation to be in the range of 3 percent in the second half.
"We will freeze the rates of major utilities, such as electricity and gas," Koo said.
Koo said the government was trying to stabilize people's livelihoods and restore the economy after the conflict in the Middle East.
The South Korean Ministry of Finance will also run a discount program for agricultural and fishery products in July and August. The government is also preparing to expand imports of fresh eggs and mackerel.
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