Korea holding down fuel prices, but it's getting harder
During much of the U.S.-Iran war, Korea shielded its economy from the sharpest swings in global oil prices by capping domestic fuel prices and restricting exports of petroleum products. But as crude prices climb again, that buffer is becoming increasingly costly to maintain, analysts said Wednesday. The government imposed a cap on prices for petroleum products, including gasoline and diesel, in…
Korea has been maintaining low fuel prices during the U.S.-Iran war, but it is becoming increasingly difficult to sustain this policy, analysts reported on Wednesday. In March, the government imposed a cap on prices for petroleum products, including gasoline and diesel, to protect its economy from global oil price fluctuations. Refiners are required to keep prices below the state-set ceiling, with the government compensating them for any losses incurred.
This measure has helped to keep inflation in check, with consumer price inflation reducing by 0.5 percentage points in August, when the headline rate was 3.1 percent. Despite the cap passing its six-month mark on Sunday, the government is struggling to undo the policy. The Middle East's renewed escalation has led to international oil prices reaching their highest levels since May 19, making it challenging for Korea to manage fuel prices effectively.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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