Kim Yong-beom, Deputy Minister for Policy at the Blue House, said on the 9th that, in connection with the rise in oil prices due to the Middle East situation, "within this week we will implement a maximum price system for petroleum products and will consider direct support measures for fuel consumers such as cutting the fuel tax." The system is planned to be designed on a two-week cycle. As the war has spread across the Middle East following U.S. and Israeli airstrikes on Iran and price volatility is high, the government will review changes every two weeks and adjust prices accordingly.
According to the Blue House, President Lee Jae-myung presided over an emergency economic review meeting on the Middle East situation for an hour and a half starting at 11 a.m. that day. Attending were key economic officials and Blue House aides, including Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, Kim Jung-kwan, Minister of Trade, Industry and Resources, Lee Eog-weon, chairman of the Financial Services Commission (FSC), Ju Biung-ghi, chairman of the Korea Fair Trade Commission (FTC), and Im Gwang-hyeon, commissioner of the National Tax Service.
After the meeting, Deputy Minister Kim said at a Blue House briefing that the Ministry of Trade and Industry (MOTI) decided to proceed within this week with the process of enacting a notice to implement the maximum price system. He added, "To ensure the system is effective, the Korea Fair Trade Commission (FTC) and the National Tax Service will closely examine whether there are market-disrupting acts such as collusion or tax evasion."
He also said, "President Lee instructed a broad review of ways to ease the burden on economic actors, including expanding the scope of fuel tax cuts and providing direct support to fuel consumers."
The maximum price system is based on the current Price Stabilization Act and Petroleum Business Act and allows the government, in an emergency economic crisis, to set maximum prices for key goods such as fuel or for real estate rents. Following President Lee's instruction, the government is also reviewing a plan to set maximum prices by region and fuel type and to impose a penalty surcharge on businesses that charge above those levels.
At the meeting, in preparation for the possibility that the Middle East situation could be prolonged, officials also discussed exercising a "right of first refusal" for 20 million barrels jointly stockpiled with oil-producing countries and redirecting Korea National Oil Corporation's overseas production to the domestic market. They also decided to seek new supply routes to replace the effectively blocked Strait of Hormuz and to prepare measures to stabilize gas supply and demand.
Deputy Minister Kim said, "We will closely examine, by scenario, the impact of higher oil prices on domestic industry and the financial market, and, if necessary, we will expand the 100 trillion won financial market stabilization program and proactively prepare additional measures."