South Korea Fuel Prices Rise as Government Mulls Price Cap System

According to data from the Korea National Oil Corp., the nationwide average price of gasoline came to 1,893.3 won (US$1.27) per liter, up 3.9 won from the previous day, while diesel rose 4.8 won to 1,915.4 won per litre, reports Yonhap news agency.

In Seoul, fuel prices also increased, though gains were limited. The average gasoline price in the capital reached 1,944.7 won per litre, up 3 won from the previous day, while diesel rose 4.9 won to 1,968.2 won.

Compared with the recent daily jumps of tens of won, the rise is significantly slower, suggesting that the government move may be helping temper the upward trend.

Sources said the government began reviewing the possibility of adopting the system after surging global crude prices were reflected almost immediately in domestic fuel prices, following U.S.-Israeli strikes on Iran and Tehran's retaliatory attacks in the region.

South Korea, which depends heavily on energy imports, is particularly vulnerable to external price shocks, which often drive inflation.

Meanwhile, the government here is considering adopting a price cap system for oil for the first time in nearly 30 years, sources said Sunday, amid concerns over rising energy prices following the escalating conflict in the Middle East.

Officials began reviewing the possibility after surging global crude prices were reflected almost immediately in domestic fuel prices, rather than after the typical two-week lag, following U.S.-Israeli strikes on Iran and Tehran's retaliatory attacks in the region.

South Korea, which depends heavily on energy imports, is particularly vulnerable to external price shocks, which often drive inflation.

- IANS