The South Korean government will impose a nationwide cap on fuel prices beginning March 13 (local time), the first such intervention since the country liberalized oil pricing in 1997.
The emergency measure aims to stabilize domestic fuel prices after the escalation of the U.S.-Iran conflict pushed global oil markets higher.
Under the policy, the government will set a ceiling on the price refiners can charge distributors and gas stations. The initial cap is set at $4.88 per gallon for regular gasoline, $4.85 per gallon for diesel, and $3.74 per gallon for kerosene.
Officials said the move is intended to reduce volatility rather than artificially suppress prices. Authorities noted that global oil price increases have recently been reflected in domestic markets much faster than usual.
Since February 27, the day before U.S. and Israeli strikes on Iranian targets, gasoline prices in South Korea have risen by about $0.57 per gallon, while diesel has increased more than $0.85 per gallon, according to government data.
The cap was calculated using a pre-tax baseline price from the last week of February, before geopolitical tensions drove prices higher. Authorities then applied the average two-week price fluctuation rate of refined petroleum products in Singapore, Asia’s benchmark market, and added fuel-related taxes.
The cap will be recalculated every two weeks based on international oil price movements.
The measure applies to regular gasoline, diesel and kerosene, while premium gasoline was excluded due to limited consumer demand.
Instead of regulating pump prices directly, the government will control refinery supply prices and intensify monitoring of retail fuel prices across the country’s more than 10,000 gas stations.
At the same time, authorities will enforce a temporary anti-hoarding order from March 13 through May 12. Refiners must maintain monthly shipments at at least 90% of last year’s levels, while distributors and gas stations are barred from stockpiling fuel or refusing sales without valid reasons.
Officials said additional measures, including fuel-tax cuts and targeted subsidies, remain under consideration if global oil prices continue to rise.
The government said the policy is intended to stabilize markets and improve price predictability for consumers, adding that its duration will depend on global oil prices and developments in the Strait of Hormuz, which handles roughly one-fifth of global oil shipments.
