Fourth Round of Maximum Petroleum Prices Also 'Frozen'... Gasoline at 1,934 Won and Diesel at 1,923 Won Maintained

"International Petroleum Product Prices Have Fallen, but Global Oil Prices Remain Unstable"
"Without the System, Diesel Would Be Around 2,800 Won... Sufficient Price Control Achieved"

On the 3rd, gasoline and diesel price notices are displayed at a gas station in Yongsan-gu, Seoul, amid a sharp rise in international oil prices due to hardline remarks by U.S. President Donald Trump. 2026.04.03 Photo by Yoon Dongjoo

The government has decided to freeze the maximum prices of petroleum products for the fourth time. Although recent declines in international petroleum product prices have created room for a price reduction, the government will maintain the current levels, considering unstable international oil prices, inflation, and demand management.

The Ministry of Trade, Industry and Energy announced that from midnight on the 24th, the fourth set of maximum prices for petroleum products will remain at 1,934 won per liter for gasoline, 1,923 won for diesel, and 1,530 won for kerosene. These levels are the same as those set in the second and third rounds.

Nam Kyungmo, Policy Advisor to the Minister of Trade, Industry and Energy, explained at a briefing on the 23rd, "The fourth round of maximum prices has also been frozen with the aim of stabilizing people's livelihoods, comprehensively taking into account fluctuations in international oil prices and their impact on inflation."

Over the past two weeks, international petroleum product prices fell by 8% for gasoline, 14% for diesel, and 2% for kerosene. Nonetheless, the government opted for a freeze rather than a reduction. Regarding this decision, Advisor Nam stated, "We took into consideration the ongoing instability in international oil prices and the need to manage demand amid a potential oil supply crisis."

He added, "Since petroleum products account for 4.66% of the consumer price index, it is necessary to block inflationary factors," and continued, "The government believes it is appropriate to share some of the burden to help reduce the public's cost of living."

The government believes that the maintenance of the maximum price system is still significantly effective in curbing prices. Advisor Nam noted, "Had the maximum price system not been implemented, gasoline prices would be around 2,200 won per liter, diesel prices would be between 2,700 and 2,800 won per liter, and kerosene would be about 2,500 won per liter," emphasizing, "This represents a substantial reduction compared to current prices." He further explained, "Even compared to a scenario where international price fluctuations are fully reflected, the current levels are sufficiently restrained, which is the result of the government absorbing part of the increase over time."

Regarding controversies over demand management, Advisor Nam commented, "Some argue that the maximum price system increases consumption, but in fact, total consumption has decreased compared to the same period last year," stressing, "The decision also considered the need to suppress demand in light of rising international oil prices."

As for the background of the continued rise in domestic prices, he pointed to time lags in the distribution process. He explained, "Refiners raised supply prices by about 210 won during the second round, but this is being gradually reflected in gas station retail prices," and added, "There is a gap of about 100 won per liter between supply and retail prices, resulting in a gradual adjustment of prices."

The government also reaffirmed the method for compensating refiners' losses. Advisor Nam stated, "Loss compensation is calculated based on cost, not international product prices," and explained, "When refiners calculate and submit their cost-based losses, the government verifies them through the Maximum Settlement Committee and then provides 100% compensation."

However, regarding the scale of these losses, he said, "At present, there is no government estimate," and added, "It is also difficult for refiners to accurately determine costs, so making a prior estimate is realistically challenging."

Advisor Nam offered a cautious outlook on future price trends. He remarked, "Given the difference between refiners' supply prices and gas station retail prices, the risk of a sharp increase is not significant," but also noted, "Since each gas station sets prices differently, it is difficult to make a definitive prediction."

Regarding the possible abolition of the maximum price system, he said, "Given the current instability in the Middle East and the situation of high oil prices, abolition is not being considered," and added, "Moving forward, we will make a comprehensive judgment based on developments such as progress in the U.S.-Iran ceasefire and the resolution of the Strait of Hormuz blockade, and the overall stabilization of international oil prices."

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