The government said on the 7th it will freeze the fifth oil price ceiling, effective for two weeks from 12 a.m. on the 8th, at the same level as the second, third and fourth rounds. As a result, the maximum wholesale price of gasoline that refiners supply to gas stations will remain at 1,934 won per liter. Diesel is 1,923 won and kerosene is 1,530 won.
Vice Minister Moon Sinhak of the Ministry of Trade, Industry and Resources said at a briefing that day the government decided to freeze the prices while considering international oil price volatility caused by the Middle East war and accumulated upward pressures, and focusing on recent consumer price trends and price stability.
As the Middle East war drags on, seeming close to ending but not, international oil prices have been swinging in the $100-per-barrel range. Brent crude, which was $118 per barrel on the 29th of last month, fell to $108 on the 1st, then rose to $114 on the 4th. After the United States hinted on the 6th that a cease-fire deal was near, saying the "Epic Fury" operation had ended, it fell to $101. That is why the government sees oil prices as still unstable.
Inflation is also concerning. The consumer price inflation rate, which held around 2% early this year, rose to 2.2% in March and 2.6% in April after the war, with the pace picking up. That is the highest level in 1 year and 9 months since July 2024. In particular, petroleum products rose 22% from a year earlier, driving overall price gains.
The vice minister said the government paid particular attention to the fact that higher oil prices feed into higher logistics and production costs and add burdens for truck drivers, delivery workers, and those in farming and fishing.
The government estimates that without the price ceiling, gasoline would now be about 2,200 won per liter and diesel about 2,500 won. The accumulated upward pressure currently being held down by the ceiling is assessed at about 200 won for gasoline and about 400 won for diesel.
On when to end the price ceiling, the vice minister said the decision will be made by comprehensively weighing two conditions: the physical factor of whether passage through the Hormuz Strait is secure and overall price stability.