12th-Round Petroleum Price Caps 'Frozen'... "Middle East Instability Persists"

Applicable for four weeks starting at midnight on the 14th
Gasoline: 1,784 won; diesel: 1,773 won; kerosene: 1,380 won per liter
"International oil prices remain more than $20 per barrel above their levels at the end of June"

The government froze the maximum prices for petroleum products that will apply for four weeks starting at midnight on the 14th. The decision took into account continued instability in the Middle East and the fact that international oil prices remain more than $20 per barrel above their levels at the end of June.

The Ministry of Trade, Industry and Energy announced on the 13th that it would keep the 12th-round maximum prices for petroleum products, which will apply for four weeks starting at midnight on the 14th, at the same levels as the 11th-round prices. As in the 11th round, the 12th-round maximum prices are 1,784 won per liter for gasoline, 1,773 won for diesel and 1,380 won for kerosene.

The Asia Business Daily DB.

A ministry official explained, "Expectations for an end to the U.S.-Iran conflict have risen recently following mediation by Qatar and others, but instability in the Middle East persists, with ships continuing to come under attack near the Strait of Hormuz. Despite the recent decline in international oil prices, prices remain high, and the burden of maritime freight costs is also substantial."

As of the 12th, Dubai crude and Brent crude stood at $90 and $96 per barrel, respectively, down $21 and $12 from their October averages. However, they remain roughly $20 or more per barrel above the levels at the end of June, when the current maximum prices were set: $72 for Brent crude and $65 for Dubai crude. In addition, the cost of transporting crude oil remains higher than before amid increased risks, including recent attacks on ships near the Strait of Hormuz. The government judged that "there is a strong need to maintain a price-stabilization policy to ease the burden on households" and decided to keep the maximum prices at the same levels as in the previous round.

The ministry again emphasized that the maximum price system has helped stabilize consumer prices and petroleum product prices. An analysis of current issues released by the Korea Development Institute (KDI) on the 12th estimated that, as a result of the system, the average monthly rate of increase in petroleum product prices from March to October this year was about 12 percentage points lower, while the average monthly consumer price inflation rate was about 0.6 percentage points lower. A report released by the Korea Institute for Industrial Economics & Trade last month also noted that domestic gasoline prices rose by 11.8% and 11.9% year over year in August and September, respectively, while price increases accelerated in major overseas countries. It assessed that the maximum price system had curbed further increases in oil prices and delivered relatively solid results.

As tensions in the Middle East continue, the government plans to use the petroleum product maximum price system to help stabilize household finances while closely monitoring domestic and international conditions as it operates the system.

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