South Korea Consumer Prices Hit 2.6% in April on Fuel Surge

Consumer prices, a key gauge of inflation, increased 2.6 percent from a year earlier last month, according to the data from the Ministry of Data and Statistics. It marks the largest on-year increase since July 2024, when inflation climbed 2.6 percent, reports Yonhap news agency.

The latest rise was driven by a surge in the price of petroleum products, which jumped 21.9 percent from a year earlier, marking the sharpest increase since July 2022.

Notably, diesel and gasoline prices jumped 30.8 percent and 21.1 percent on-year, respectively. They also mark the sharpest on-year increase since July 2022.

Global oil prices have risen sharply as the Strait of Hormuz has effectively been closed since U.S.-Israeli strikes on Iran in late February, disrupting global oil supplies. South Korea relies heavily on imports to meet its energy needs.

The ministry noted the rise was partly offset by temporary price caps on fuel products, a measure designed to curb price increases caused by the Middle East conflict.

Under the system, adopted in March, the government sets maximum prices for fuel products supplied by refiners to gas stations and distributors every two weeks, reflecting changes in global oil prices.

"The measures had a moderating effect not only on fuel prices but also on overall consumer inflation," said Lee Doo-won, a ministry official. "However, fuel prices may see a slight increase in May."

Later in the day, First Vice Finance Minister Lee Hyoung-il reported to the Cabinet meeting that price stabilisation measures, including a fuel price cap and a temporary fuel tax cut, reduced overall inflation by 1.2 percentage points.

Prices of industrial products rose 3.8 percent, marking the fastest growth since February 2023, when they increased 4.8 percent.

Service prices also increased 2.4 percent from a year earlier, driven by higher insurance costs.

Rising oil prices also pushed up fuel surcharges, sending international airfares sharply higher.

The increase in international flight costs accelerated to 15.9 percent in April from 0.8 percent the previous month, while domestic airfares, which rose 0.8 percent, are expected to further increase in May, the ministry said.

- IANS