As the government is set to introduce a "maximum oil price system" this week, the Bank of Korea (BOK) assessed that if the system is implemented, it would ease consumers' expense burdens.
The Bank of Korea (BOK) offered this explanation when asked about the effect of introducing a maximum price system at a press briefing on the "currency and credit policy report" held at the BOK headquarters on the 12th.
Lee Ji-eun, head of the economic trends team at the Bank of Korea (BOK), said, "The government is reviewing and discussing various policies related to recent oil prices, and if implemented, they will play a role in easing some of the pressure on the expense side." However, Lee added, "It is difficult to say how much relief there will be because no specific measures have been announced."
The maximum oil price system is a policy that sets an upper limit on the sales price of petroleum products such as gasoline and diesel, prohibiting sales above that level. The government decided to introduce the maximum price system, judging that the average gasoline price at gas stations, which has surged to around 1,900 won per liter since the Middle East crisis, is excessive.
On the same day, in response to a question on "opinions on the price cap system" from lawmaker Cha Kyu-geun of the National Assembly's Planning and Finance Committee, affiliated with the Rebuilding Korea Party, the Bank of Korea (BOK) answered, "There is a positive effect in that it temporarily reduces the burden on consumers when a major external shock such as a sharp rise in international oil prices occurs." However, it added, "The longer the introduction period, the greater the side effects, such as excess demand."