As international oil prices have fallen to levels seen before the Middle East conflict, the government is considering lowering the maximum price caps on petroleum products to ease the burden on the public.
The move is intended to stabilize consumer prices by flexibly managing the price cap system, which was originally introduced to protect the public from the shock of high oil prices, in line with the downward trend in global oil markets.
According to the Ministry of Trade, Industry and Energy on the 26th, the price of Brent crude futures stood at $73.14 per barrel as of 8:00 a.m. the previous day, effectively returning to the level seen just before the war ($72.48).
West Texas Intermediate (WTI) also fell below the $70 mark, trading at $69.92.
Dubai crude was recorded at $67.29, making it even cheaper than it was before the war.
An official from the Ministry of Trade, Industry and Energy explained, "International oil and gas prices have fallen due to expectations of increased supply from the Middle East following the normalization of passage through the Strait of Hormuz."
However, domestic gas station prices, which the public feels directly, remain stagnant.
As of 8:00 a.m. the previous day, the national average price for gasoline was 2,007 won, and diesel was 1,998 won, maintaining high prices around the 2,000-won mark for three months since April.
This remains a significant gap compared to the 1,500 to 1,600 won range seen before the war.
The primary reason why the drop in international oil prices is not immediately reflected in domestic prices is the "time lag."
Since gas stations typically receive supplies every two to three weeks, the structure requires that the more expensive inventory from the previous period must be sold off before prices can be lowered.
Furthermore, the fact that the maximum price caps set by the government remain at high levels is also cited as a factor hindering price decreases.
The government implemented the maximum petroleum price system on March 13 to curb the rapid rise in oil prices.
As oil prices skyrocketed following the outbreak of the Middle East war, the government set a ceiling on the wholesale prices that refineries supply to gas stations.
The maximum price caps have remained unchanged for nearly three months since the second adjustment on March 27, when they were raised by 210 won per liter for each fuel type.
The current caps are 1,934 won for gasoline, 1,923 won for diesel, and 1,530 won for kerosene.
While the maximum price system served as a "defensive line" to prevent a surge in domestic oil prices when it was first introduced, it has now become a benchmark that restricts the rapid decline of domestic prices as international oil prices fall.
In response, the government plans to lower the maximum price caps to induce a reduction in retail gas station prices, thereby fulfilling the system's original purpose of stabilizing public livelihood prices.
President Lee Jae-myung expressed a strong commitment to public stability during a senior secretaries' meeting the previous day, stating, "The Blue House and the government must swiftly pursue more drastic measures, including adjustments to the maximum price system, to stabilize petroleum prices."
Minister of Trade, Industry and Energy Kim Jeong-gwan also said at a press conference on the 22nd, "The current oil price level has come down from the wartime peak, so I believe there is an incentive to lower the price caps themselves, and we are currently reviewing it."
(Photo: Yonhap News)