South Korea raises fuel prices amid Middle East crisis
The government announced Thursday adjusted price ceilings for domestic fuel products, which will take effect midnight, under a temporary fuel price cap system introduced to help ease cost burdens amid surging fuel prices caused by Mideast tensions, Yonhap reports.
Maximum prices for regular gasoline, diesel and lamp oil supplied to gas stations by local oil refineries have been raised to 1,934 won (US$1.28), 1,923 won and 1,530 won per liter, respectively, according to the Ministry of Trade, Industry and Resources. The price caps will be effective for the next two weeks starting midnight.
They mark an increase from the initial price ceilings of 1,724 won per liter for regular gasoline, 1,713 won per liter for diesel and 1,320 won per liter for lamp oil, which were implemented two weeks ago.
In addition to gasoline, diesel and lamp oil, the government decided to include marine diesel to the list of fuel products subject to the price cap system in a bid to relieve cost burdens on fishermen, according to the ministry.
The government introduced the fuel price cap system two weeks ago on March 13 for the first time since 1997 in a bid to rein in domestic fuel prices that spiked after the United States and Israel launched airstrikes against Iran, which in turn led to the effective closure of the Strait of Hormuz, a major global oil export route.
Under the price cap system, the government sets maximum prices for fuel products supplied by oil refineries to gas stations and retail distributors every two weeks, reflecting changes in international oil prices.
The government plans to lift the price ceiling when domestic fuel prices stabilize.
On top of such a measure, the government has been conducting an intensive crackdown on unfair market practices involving fuel products, including hoarding and price gouging, to prevent excessive fuel price hikes.
Amid disruptions in crude oil supply from the Middle East, the government raised its national resource security crisis warning by a notch to Level 2 under the country's four-tier alert system last week.
It also plans to release 22.46 million barrels of oil from strategic reserves next month under an agreement among International Energy Agency (IEA) members, according to Seoul officials.
Earlier, it was reported that the ADB had announced financial support package to help Asia and Pacific mitigate impacts from the Middle East conflict.
