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South Korea Imposes Wholesale Price Cap on Refiners, Aims for 100 Won Fuel Price Cut Starting Tomorrow
Introduction of Petroleum Wholesale Price Cap System and Operational Plan
The South Korean government is introducing a 'petroleum maximum price system' for the first time in 29 years, effective tomorrow (the 12th), which sets a cap on the wholesale price that oil refiners supply to gas stations. This aims to lower fuel prices by approximately 100 won per liter. The maximum price will be calculated by multiplying the average supply price of the four domestic oil refiners by the fluctuation rate of Singapore's petroleum prices, then adding existing taxes and duties. The initial price will be based on the fourth week of February, before fuel prices surged. The targets are regular gasoline, diesel, and kerosene, excluding premium gasoline. This system will initially operate on a two-week basis, with extensions and prices subject to readjustment based on market conditions.
Preventing Hoarding and Plans for Loss Compensation
To prevent oil refiners from adjusting supply volumes (hoarding) in anticipation of rising fuel prices, the government will conduct intensive crackdowns for two months. To curb practices of reducing domestic supply and increasing exports, oil refiners' export volumes will also be restricted to last year's levels. Any losses oil refiners may incur during this period will be verified by a government committee and compensated. Since final consumer prices are determined by individual gas stations, direct retail price regulation is initially excluded. Koo Yun-cheol, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, stated that the system could be lifted if oil prices stabilize and fall to the 1,800 won range. Yang Ki-wook, Director-General for Energy, Resources and Industrial Security at the Ministry of Trade, Industry and Energy, explained that uniform regulation is difficult due to significant price differences across regions and gas stations. The government plans to publish the final confirmed prices in the official gazette and implement them at gas stations nationwide.
*Source: YouTube: JTBC News (2026-03-12)*
