(Seoul = Yonhap News) Reporter Jang Bo-in = Amid continued uncertainty in the Middle East situation, the government freezes the highest oil price for the 9th time.
The maximum oil price system, which went into effect on March 13, has now exceeded six months since its introduction with the 9th price application.
The Ministry of Trade, Industry and Energy announced on the 21st, “The 9th maximum oil price, which will be applied for the next four weeks from midnight on the 22nd, will be frozen at the existing 8th maximum price.”
Accordingly, the 9th highest price remains the same as the 7th and 8th at 1,784 won per liter (L) for gasoline, 1,773 won for diesel, and 1,380 won for kerosene.
This price has been maintained since the 7th price cut by 150 won per liter on June 26 as international oil prices fell following the agreement between the United States and Iran to end the Middle East war.
The Ministry of Trade, Industry and Energy announced that it decided to freeze prices considering the burden on people's livelihood and international oil prices.
As the standoff between the two countries continued even after the 60-day period of the previous memorandum of understanding (MOU) between the United States and Iran expired, international oil prices, which fell to the $70 per barrel range early this month, rose to $93.8 for Brent crude and $95.6 for Dubai oil on the 20th.
The Ministry of Trade, Industry and Energy explained that although there is a possibility that international oil prices will rise further, it has comprehensively taken into account the similarities with the 8th highest price decision and the burden on people's livelihoods due to the country's abnormal climate such as recent heat waves and heavy rains.
Domestic oil prices have continued to fall since June 27th, reaching 1,862 won per liter for gasoline and 1,845 won per liter for diesel as of the 20th.
The Ministry of Trade, Industry and Energy initially planned to seek an exit strategy from the maximum price system by considering the previous situation, whether traffic in the Strait of Hormuz would be normalized, and international oil prices.
Under the premise of maintaining the maximum price system for six months, a reserve fund of 4.2 trillion won was set aside to compensate for losses at oil refineries.
However, as the conflict in the Middle East continued, the exit became further away again. The Ministry of Trade, Industry and Energy is expected to maintain the maximum price system for the time being until the situation in the Middle East stabilizes, even if the operating period exceeds six months.
At a meeting of senior aides at the end of last month, President Lee Jae-myung instructed, "I hope that the maximum oil price system will be continued until the oil price instability is clearly resolved, and policy measures such as fuel tax cuts will be maintained as much as possible."
An official from the Ministry of Trade, Industry and Energy said, "We will monitor domestic and international situations in real time and operate the highest price system in an agile and flexible manner by comprehensively considering the situation in the Middle East, oil supply and demand, prices and the burden on people's livelihood, and the need for demand management."
Regarding concerns that reserve funds may be insufficient, he said, "It is difficult to predict whether there will be a shortage as settlement is in progress and the maximum price system is being extended, but so far, we believe it will be possible to cover it within the scope of programming."
