[News Today] Fuel cap price frozen again

[LEAD]

Uncertainty from the war continues, and concerns over fuel prices here at home remain. The government has decided to freeze the fuel price cap once again, citing inflation concerns.

[REPORT]

As the fourth round of the fuel price-cap system is to be applied for the next two weeks, the maximum gasoline price will be 1,934 won, diesel 1,923 won, and kerosene 1,530 won.

The price cap is frozen at the same level for the second time straight.

The government continues to enforce the price cap system despite the criticism that demand for oil hasn't decreased because the government has blocked oil prices from rising.

This decision is driven by inflation concerns.

The manufacturer prices of coal and petroleum products soared 31.9% since the war in the Middle East began.

If the cap is raised, the increase would likely lead to inflation.

Nam Kyung-mo / Ministry of Trade, Industry and Resources

We considered the need to block in advance inflation risks driven by increased oil prices.

The government froze the ceiling prices but it doesn't guarantee that the prices at the gas pumps will remain the same.

The maximum price rose 210 won four weeks ago, but fuel prices at gas stations nationwide increased less than that. The difference may be reflected in the latest price hike.

As the fourth round of the fuel price cap system is implemented,

fiscal burden is increasing as well.

The government and oil refiners have far differing views on the losses involved.

Kim Tae-hwan / Korea Energy Economics Institute

There will likely be debates over details like whether the decision should be based on the market price or the cost.

The government also plans to lower the oil tax on butane used mostly by the working class.