Maximum Oil Price Cap Frozen Again: Gasoline at 1,784 Won, Diesel at 1,773 Won

Amid ongoing uncertainties in the Middle East situation, the government is freezing the 9th maximum petroleum price.

Implemented since March 13, the maximum petroleum price system will surpass six months since its introduction with this 9th price application.

The Ministry of Trade, Industry and Energy announced today (the 21st) that "the 9th maximum petroleum price applied for the next four weeks starting from midnight on the 22nd will be frozen at the previous 8th maximum price."

Accordingly, the 9th maximum prices will be maintained at 1,784 won per liter for gasoline, 1,773 won for diesel, and 1,380 won for kerosene, the same as the 7th and 8th prices.

This pricing is maintained following the reduction of the 7th price by 150 won per liter on June 26, as international oil prices fell after the agreement between the United States and Iran to end the Middle East war.

The Ministry of Trade, Industry and Energy stated that it decided on this price freeze taking into consideration the burden on people's livelihoods and international oil prices.

Even after the expiration of the 60-day period of the memorandum of understanding (MOU) on ending the war between the United States and Iran, confrontation between the two countries has continued, causing international oil prices—which had dropped to the 70 dollar range per barrel earlier this month—to rise to 93.8 dollars for Brent crude and 95.6 dollars for Dubai crude on the 20th.

The Ministry of Trade, Industry and Energy explained that while international oil prices have the potential to rise further, it comprehensively considered factors such as similarities to the time of the previous 8th maximum price decision and the burden on people's livelihoods caused by recent domestic abnormal weather conditions including heatwaves and torrential downpours.

Domestic oil prices have continuously declined since June 27, recorded as 1,862 won per liter for gasoline and 1,845 won for diesel as of the 20th.

The Ministry of Trade, Industry and Energy's original policy was to seek an exit strategy for the maximum price system while considering the end-of-war situation, whether normal navigation through the Strait of Hormuz is restored, and international oil prices.

It had even allocated 4.2 trillion won in general contingency funds to compensate for refinery losses, under the premise of maintaining the maximum price system for six months.

However, as conflicts in the Middle East region continue, the exit has moved further away again.

The Ministry of Trade, Industry and Energy plans to maintain the maximum price system for the time being until the Middle East situation stabilizes, even if the operational period exceeds six months.

President Lee Jae-myung instructed during a senior secretaries meeting at the end of last month, "I hope that the maximum petroleum price system will be maintained until the time when oil price instability is completely resolved, and policy tools such as fuel tax cuts should also be maintained to the maximum extent possible."

An official from the Ministry of Trade, Industry and Energy said, "While monitoring domestic and international situations in real time, we will operate the maximum price system agilely and flexibly by comprehensively considering the Middle East situation, petroleum supply and demand, price levels, the burden on people's livelihoods, and the necessity of demand management."

Regarding concerns that contingency funds might fall short, the official stated, "Settlements are underway and the maximum price system is being prolonged, so it is difficult to forecast whether there will be a shortage, but we believe it can be accommodated within the allocated scope up to now."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.