The First Government Fuel Price Cap in 30 Years... "Let's Hold Out With Just 30,000 Won": Cautious Moves at Gas Stations [Report]

The government launches a joint investigation into unfair profiteering

"Only as much as needed"... Citizens cut back on fuel purchases

"Expecting price stabilization" vs. "Concerns over burdens on station owners"

On March 8, the first weekend after President Lee Jaemyung introduced the bold policy of a "price ceiling system" in response to the surging oil prices caused by the fallout from the US-Iran war, a customer was seen at a gas station in Mapo-gu, Seoul. Choi, a 51-year-old self-employed regular at the station, hesitated for a moment after getting out of his white SUV before grabbing the fuel nozzle. Unlike usual, Choi decided to reduce the amount he refueled.

Watching the dashboard with the nozzle inserted into the tank, Choi said, "Normally, I fill up with 50,000 won worth of fuel, but today I only put in 30,000 won." He added, "Since the government is sending out inspection teams and promising strict action, I plan to fill up completely after the sanctions are actually implemented." The price of gasoline at this station on that day was 1,847 won, which is about 60 won higher than last week.

As the Middle East conflict intensifies, the average price of gasoline and diesel in the Seoul area has entered the mid-1900 KRW range. On the 8th, fuel prices were displayed at a gas station known as a low-price station in Seoul city. Photo by Bokyung Jang

Among citizens encountered over the weekend, there was a noticeable trend of reducing fuel purchases and choosing to wait and see how the situation unfolds. Like Choi, many drivers said they would only buy as much as they immediately needed. This was due to the news that the government had ordered a direct cap on fuel prices.

Kim Jiwon, a 26-year-old graduate student, said, "I don't drive much, so I only refuel occasionally, but I was shocked by today's prices. I think it's better to just put in a little today and wait until the price ceiling system is implemented." Kim, who shares a car with two family members, left the gas station after buying only 50,000 won worth of fuel, which was less than usual.

Lee, a customer in his seventies who visited a gas station in Cheongam-dong, Yongsan-gu, Seoul, commented, "I don't understand why fuel prices in Yongsan are higher than in Gangnam," and predicted, "If the government investigates collusive practices among gas stations, it will help normalize prices."

In contrast, gas stations selling fuel below the average price saw crowds of customers. At a self-service station in Yongsan-gu, Seoul, selling gasoline and diesel at 1,798 won and 1,758 won per liter, respectively, eight vehicles were lined up. According to Opinet, the Korea National Oil Corporation's price information system, as of 10 a.m. that day, this station had the lowest gasoline and diesel prices in Yongsan-gu.

Lee, a customer in his forties refueling a compact car, said, "Because this station is known for having the lowest prices, all my acquaintances come here. Since the price is low, I always fill up the tank." Another customer added, "On weekends, there are even discount events, so even if I have more than half a tank left, I fill it up. I always stop by here when coming into downtown Seoul from the outskirts."

Around noon on the 8th, gas stations in downtown Seoul, known as the "lowest-priced gas station in Yongsan-gu," saw a continuous stream of vehicles lining up to refuel. Photo by Jang Bokyung

Gas station operators had mixed reactions to the price ceiling system.

The government is currently considering setting maximum prices for petroleum sales based on Article 23 of the Petroleum and Alternative Fuels Business Act. On March 5, President Lee Jaemyung instructed, "Promptly set realistic maximum prices by region and type of fuel." If the price ceiling system is actually implemented, it will mark the first time in 30 years since the liberalization of petroleum prices in 1997 that the government has intervened directly to control prices.

Kim Jaesung, the 49-year-old manager of a gas station in Yongsan-gu, argued that regulatory measures such as the introduction of a price ceiling system should be accompanied by efforts to improve the domestic fuel pricing structure. Kim stated, "We currently have enough reserves to supply fuel, but there is an unfair practice where increases in Singapore fuel prices are immediately reflected in domestic prices, while decreases are adjusted much more slowly." He pointed out that this practice needs to be changed.

He continued, "If the price ceiling system is implemented simultaneously, it will help lower fuel prices. President Lee's policy approach is not about patching up only the problematic parts, but rather about sequentially revising multiple systems, so I expect this will lead to price stabilization."

On the morning of the 8th, an employee is refueling a vehicle at a gas station in Mapo-gu, Seoul. Photo by Bokyung Jang

On the other hand, Kim, the 50-year-old owner of a gas station in Mapo-gu, Seoul, expressed a negative view of the price ceiling system. He said, "Each gas station pays a different price to bring in fuel, so setting a ceiling essentially means, 'You can only make this much profit.' I don't know what the ceiling will be set at, but from an operator’s point of view, there is no benefit."

A staff member in his seventies who works at the same station also said, "Each gas station autonomously sets its selling price after considering inventory and prices at nearby stations, so imposing uniform control is problematic. The priority should be to control the refinery release prices," he emphasized.

This content was produced with the assistance of AI translation services.