Vice Minister Moon Shinhak: "Inevitable Oil Price Hike on the 27th"... Maximum Price System Set to Rise

Two-Week Lag in Reflecting International Oil Price Increases

"Buffer Mechanism in Place, but Price Hike Unavoidable"

Price Pressure Persists Despite Securing 24 Million Barrels from UAE

Soonsahk Moon, Deputy Minister of the Ministry of Trade, Industry and Energy. The Asia Business Daily DB.

Soonsahk Moon, Deputy Minister of the Ministry of Trade, Industry and Energy, stated on March 20 that the maximum price of petroleum products will inevitably increase with the upcoming second adjustment of the oil price cap scheduled for the 27th, as the recent rise in international oil prices is being reflected.

On CBS Radio's 'Park Sungtae's News Show' on March 20, Deputy Minister Moon explained, "The current maximum price system is not a fixed price, but rather a structure that reflects international product prices every two weeks," and added, "Since oil price increases are reflected with a time lag, the second price adjustment will incorporate these upward factors."

However, he emphasized that there is still room for price reductions in the short term. Deputy Minister Moon said, "Based on refinery supply prices, there was a reduction effect of about 100 won for gasoline and about 200 won for diesel, but this has not yet been sufficiently reflected at gas stations," adding, "Prices should decrease further this week."

The government is also strengthening its monitoring of gas station pricing practices. Deputy Minister Moon said, "We are releasing cases of suspected excessive margins based on price and volume data by gas station, and conducting joint inspections involving the police and the National Tax Service."

As part of its response to the Middle East crisis, the government is also working to stabilize crude oil supply. Deputy Minister Moon stated, "We have secured a total of 24 million barrels from the United Arab Emirates (UAE)," and emphasized, "In a situation where countries around the world are striving to secure alternative supplies, this is highly effective for supply stability." He went on to explain, "This amount exceeds the volume jointly released by the International Energy Agency (IEA)."

This procurement took place amid heightened concerns over potential disruptions to Middle Eastern crude oil imports due to the blockade of the Strait of Hormuz. Deputy Minister Moon said, "The Persian Gulf route is difficult to use at present," and explained, "Please understand that the structure involves importing through alternative ports or various routes." However, regarding specific routes, he noted, "Due to the sensitivity of the local situation, it is difficult to provide detailed information."

Reports indicate that the local situation was also urgent. He said, "Just before landing at Dubai Airport, a drone attack on a fuel storage facility forced the plane to change its landing site, and there were even evacuations due to missile warnings," adding, "The situation was a much more serious state of war than expected."

The government is maintaining a cautious stance on releasing strategic petroleum reserves. Deputy Minister Moon said, "The only current decision is to release 22.64 million barrels in cooperation with IEA," and added, "Since strategic reserves are the last resort to be used only in emergencies, we plan to utilize them only if necessary after all supply measures have been implemented." He further explained, "We are continuously simulating the timing and volume of possible releases together with refiners and Korea National Oil Corporation."

He also mentioned the possibility of restricting refinery exports if supply conditions worsen. He said, "In an emergency, the livelihoods of the people and industrial production come first," adding, "Legal measures such as supply adjustment orders or export restrictions are in place."

Measures to protect vulnerable groups from the rise in oil prices are also being promoted. Deputy Minister Moon said, "We are reviewing the expansion of energy vouchers and additional support through a supplementary budget," and added, "We plan to strengthen targeted support."

As for demand management, policies such as the five-day vehicle rotation system are also being considered. Deputy Minister Moon said, "Policies to reduce energy consumption are necessary," and noted, "The implementation timing will be decided based on the situation."

Deputy Minister Moon emphasized, "Volatility in energy prices is increasing due to the Middle East crisis," and stressed, "The government will mobilize all possible means to ensure price stability and supply management."

This content was produced with the assistance of AI translation services.