Global Oil Prices Surge Again... Oil Price Caps and Fuel Tax Cuts Maintained

[Anchor]

Global oil prices have climbed back above 100 dollars a barrel. Brent crude, which dropped to the low 70-dollar range earlier this month, has surged more than 30 percent in just three weeks. The jump follows an attack by Yemen's Iran-backed Houthi rebels on two Saudi oil tankers off the coast, heightening concerns that the Red Sea could be blocked following the Strait of Hormuz. Amid growing worries that the instability in global oil prices will spill over into domestic fuel prices, the government has frozen the 8th petroleum price cap and extended the fuel tax cut, which was set to expire at the end of this month, for another two months.

Reporter Choi Seung-hun has the story.

[Reporter]

Cars pull into a gas station in Seoul one after another.

Hunting for cheap gas has become a daily routine since the Middle East war.

[Kwak Kyung-lim / Gangseo-gu, Seoul: It is so tough for people like us who have to hunt around just for cheap places. I really hope the war ends quickly, but now it is starting all over again...]

[Lee Nam-jae / Gangseo-gu, Seoul: I do not have much going on in my old age, but when fuel prices go up, isn't it hard just to drive a car?]

As of 7:00 PM today (July 24), the national average retail prices at gas stations stand at 1,870 won per liter for gasoline and 1,855 won for diesel.

The downward trend began to slow down in mid-July as tensions in the Middle East escalated, and prices even saw slight increases in Seoul.

As oil prices show signs of instability once again, the government has decided to freeze the 8th petroleum price cap, which will be applied for four weeks starting tomorrow, at the existing level.

The upper limits for refinery supply prices are set at 1,784 won per liter for gasoline, 1,773 won for diesel, and 1,380 won for kerosene.

When the government lowered the 7th price cap by 150 won per liter on June 27, it had even considered terminating the price cap system depending on global oil market conditions, but that is no longer feasible for the time being.

[Yang Ki-wuk / Head of the Industrial Supply Chain Security Office, Ministry of Trade, Industry and Energy: We expect it to remain at the current level for the time being. If there are sudden changes in the situation, we may reach a point where we have to make adjustments (even within the four-week period).]

In addition, the fuel tax cut set to expire at the end of this month will be extended by two months until the end of September, and the ban on hoarding urea and urea solution will be maintained for another month.

The government explained that while the fiscal burden from operating the price cap system is still at a manageable level, alternative measures will need to be considered if the operation period exceeds six months.

(Photo: Yonhap News / Video by Park Hyun-chul | Video Editing by Cho Mu-hwan | Graphics by Lee Ga-jin)
※ Please note: This article was translated by AI and may contain errors.