Kim Junggwan: "Maximum Price System Is a 'Breakwater for Livelihoods'... Now Is Not the Time to Ease Export Controls"

"Price Caps Alone Are Not Enough: Supply Must Also Be Protected"

"Exports Are Not Blocked—Permitted Up to Last Year’s Levels"

"Safe Passage Through Hormuz Not Guaranteed: Safeguards Cannot Be Lifted First"

Kim Jungkwan, Minister of Trade, Industry and Energy, is attending a Kwanhun Debate on August 6 and participating in a Q&A session. Ministry of Trade, Industry and Energy

Kim Junggwan, Minister of Trade, Industry and Energy, has drawn a clear line regarding calls to relax export restrictions amid improved domestic petroleum supply conditions. He stressed that while international oil prices and the domestic supply-demand situation have somewhat stabilized, the Middle East crisis is still ongoing, and thus securing sufficient petroleum products for the daily lives of the public and for industrial activity in Korea must remain the top priority.

On August 11, Minister Kim posted on his Facebook account under the title "The Middle East Crisis Is Still Ongoing." He stated, "The fact that supply conditions are improving is something entirely different from the crisis having ended." Recently, as the domestic crude oil supply situation has improved and requests from overseas for Korean petroleum products have grown, some in the industry have argued for an easing of export restrictions. Their position is that, since prices are capped domestically due to the maximum price system, increased exports should be allowed to compensate companies for losses.

Minister Kim, however, emphasized that both the maximum price system and export management must be enforced together. He explained that the maximum price system acts as a "breakwater for people's livelihoods" by mitigating the burden on the public from surges in international oil prices, while export management is a tool designed to ensure sufficient supply for domestic needs. He stressed, "Protecting people’s lives cannot be achieved by capping prices alone," and added, "We need actual supply." He argued that, with a domestic price ceiling in place, a sharp rise in foreign prices would incentivize refiners to shift more supply abroad in pursuit of higher prices, which could result in decreased domestic supply and supply-demand instability.

Kim Jung-kwan, Minister of Trade, Industry and Energy, visited a gas station in Seoul on May 19 to listen to the difficulties faced by gas stations following the implementation of the maximum price system. Ministry of Trade, Industry and Energy

The Minister also highlighted that the government is not completely blocking exports. Taking into consideration the demand from foreign countries and companies that rely on Korea's petroleum products, exports are being permitted up to 100% of last year's volume, which is the normal level. In fact, between March and June of this year, gasoline, diesel, and kerosene export volumes dropped by 21.4% compared to the same period last year, but export value actually rose by 45.4%. The total export value of all petroleum products, including jet fuel and base oil, increased by 50.9%. Citing these figures, Minister Kim explained, "Export management is not a measure to prevent companies from exporting, but rather a minimum safeguard to protect the supply needed domestically in case of an emergency."

The primary reason the government maintains emergency measures is its assessment that the situation in the Middle East remains unstable. Minister Kim pointed out that stable navigation through the Strait of Hormuz cannot be guaranteed, and uncertainties persist in the alternative routes via the Red Sea and the Bab el-Mandeb Strait. While government and private sector efforts have led to a gradual recovery in crude oil supplies and refinery operating rates, he cautioned that this does not mean the crisis is over.

Minister Kim stated, "Emergency measures should not be maintained any longer than necessary," but also stressed, "We must not remove safeguards before the risks have disappeared." He added that the government will closely monitor international oil prices, crude oil imports, domestic inventory, and refinery operations, and will take steps to normalize policies as soon as circumstances are deemed sufficiently stable. Minister Kim concluded, "The interests of companies are important, and exports matter. But in a crisis, the stability of people's lives and domestic supply comes first." He further declared that, "Until the supply-demand situation becomes stable, the government and businesses will work together to safeguard the daily lives of the public."

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