The government said on the 26th that, starting on the 27th, it will apply a second petroleum price ceiling to wholesale prices at gas stations. The second ceiling will be set by comprehensively considering the first ceiling designated on the 13th (gasoline 1,724 won, diesel 1,713 won) and recent international oil prices. The government also said it will implement a restriction on naphtha exports, where supply shortages are a concern, starting on the 27th.
Minister Kim Jung-kwan of the Ministry of Trade, Industry and Resources said at a briefing on the "emergency economic response plan following the Middle East war" that "as of 12 a.m. on the 27th today, the second petroleum price ceiling is set to be designated." The minister added, "The second ceiling will be determined by comprehensively considering the recent international oil price, domestic and overseas petroleum supply and demand conditions, and the impact on people's lives, based on the first ceiling."
The government moved to designate the second petroleum price ceiling because it determined that petroleum product prices had not stabilized even after the first designation. The average domestic gasoline price has remained high, rising from 1,693 won per liter before the Middle East crisis to 1,819 won as of the 25th, and diesel from 1,597 won to 1,815 won. When designating the second ceiling, the government also decided to include marine diesel, which had been excluded from the previous scope.
In addition, the government plans to implement export restrictions on naphtha starting on the 27th. Naphtha is a carbon compound separated during crude oil refining. Cracking naphtha produces basic petrochemical feedstocks such as ethylene and propylene. Naphtha accounts for about 55% of domestic production, with the remainder dependent on imports from overseas, including the Middle East.
The export restriction measure is based on the Price Stabilization Act. Under Article 6 of the law, the competent ministry minister may order ▲ changes to production plans ▲ directions on supply and shipment ▲ controls on imports and exports for goods experiencing a surge in prices or a supply shortage.
Meanwhile, the government will also implement a notice banning hoarding of urea solution and urea starting on the 27th. Prices for urea solution are also rising internationally due to the Middle East crisis. According to the notice, companies dealing in automotive urea solution or urea may not store more than 1.5 times last year's monthly average sales volume for longer than one week. They also may not refuse to sell to consumers without a valid reason. Violations of the notice are punishable by up to three years in prison or a fine of up to 100 million won.