South Korea Lowers Fuel Price Ceilings, Freezes Utility Rates to Combat Inflation

SEOUL, June 26 (Yonhap) -- South Korea on Friday lowered price ceilings on fuel products to reflect the recent decline in global crude oil prices, with the finance minister vowing to freeze electricity and gas rates in the second half of the year to further tame inflation.

Finance Minister Koo Yun-cheol made the remarks during a meeting with economy-related ministers, noting the cap system will remain in place until consumer prices are fully stabilized.

Under the adjustment announced late Friday, maximum prices for regular gasoline, diesel and kerosene supplied to gas stations by local oil refiners will each be lowered by 150 won to 1,784 won (US$1.16), 1,773 won and 1,380 won per liter, respectively, starting Saturday.

In mid-March, the government introduced fuel price caps in a bid to stabilize domestic fuel prices amid supply chain disruptions caused by the conflict in the Middle East.

"The government will adjust the emergency measures currently in place in phases by closely monitoring developments in the Middle East and the South Korean economy," Koo said.

Koo noted external uncertainties have been gradually easing following the memorandum of understanding (MOU) between Washington and Tehran.

"However, as uncertainties still remain surrounding follow-up negotiations, burdens on the public, such as high consumer prices, the weak Korean won, high interest rates and slowing employment, continue," Koo said during the meeting.

The finance minister added that the government aims to keep inflation at around 3 percent in the second half.

"We will freeze prices of major utilities, such as electricity and gas," Koo said.

"The government is making proactive efforts to stabilize and improve people's livelihoods, while making full-fledged efforts to normalize and advance the economy following the war in the Middle East," he added.

The finance ministry said South Korea will also implement discount programs for agricultural and fishery products in July and August, along with measures such as expanding imports of fresh eggs and mackerel.