Government Freezes Maximum Oil Price for Fifth Time... Gasoline at 1,934 Won, Diesel at 1,923 Won Maintained

"Considering Rising Prices and Logistics Costs"

"If Not for the Price Cap, Diesel Could Have Reached 2,500 Won"

"Extension of Oil Stockpile Swap Until July Under Review... Expansion of Non-Middle Eastern Imports Promoted"

The government has once again frozen the maximum oil prices. This measure takes into account the continued volatility of international oil prices and the fact that rising oil product prices are increasing the burden on consumer prices and logistics costs.

On May 7, Moon Sin-hak, Vice Minister of Trade, Industry and Energy, stated at the daily briefing of the "Middle East War Response Headquarters" held at the Government Complex Sejong, "The fifth maximum price, which will take effect from midnight on May 8, has been set at 1,934 won per liter for gasoline, 1,923 won for diesel, and 1,530 won for kerosene, the same as the fourth maximum price." He added, "We decided on a freeze, considering the recent rise in consumer prices and the burden on people's livelihoods."

With this measure, the government has maintained its stance of freezing the maximum price for four consecutive times since the introduction of the maximum price system in March. Vice Minister Moon explained that although the recent increases in international oil prices have not been fully reflected in the maximum prices, resulting in accumulated factors for price hikes, priority was given to the burden on prices and people's livelihoods. In fact, international oil prices have been fluctuating sharply around 100 dollars per barrel of Brent crude recently.

Vice Minister Moon said, "The consumer price inflation rate, which was around 2% at the beginning of this year, rose to 2.6% in April, and oil product prices have increased by 22% compared to the same period last year, leading the overall price increase." He added, "Even though the maximum price system had the effect of lowering the April consumer price index by 1.2 percentage points, the burden on prices remains significant."

The government particularly emphasized that rising prices of diesel and kerosene directly impact the burdens of truck drivers, delivery workers, and those in the agriculture and fisheries sectors. Vice Minister Moon said, "Since rising oil prices lead to higher logistics and production costs, we prioritized the stabilization of livelihoods above all else."

However, the government is also feeling the pressure from the accumulated factors for price increases. Yang Ki-uk, Director General for Industrial Security at the Ministry of Trade, Industry and Energy, explained, "Currently, the accumulated factors for price increases are about 200 won for gasoline and in the 400-won range for diesel." The government stated that while the formula for international price fluctuations was referenced at the time of the first and second maximum price designations, it has recently been deciding prices based mainly on the accumulated factors for increases.

On the 7th, Moon Sin-hak, Vice Minister of Trade, Industry and Energy, is giving a briefing on the Middle East situation and the 5th designation of the highest oil price at the Government Complex Sejong. Ministry of Trade, Industry and Energy.

Regarding the timing for ending the maximum price system, Vice Minister Moon said, "We need to comprehensively consider two conditions: whether the normalization of passage through the Strait of Hormuz is achieved and whether the volatility of international oil prices has stabilized." He emphasized, "Whether volatility has stabilized is more important than the absolute price level itself."

The government currently assesses that the supply of crude oil and naphtha is being managed in a relatively stable manner. According to the Ministry of Trade, Industry and Energy, the average crude oil procurement for May to July is about 70 million barrels, more than 80% of last year's level, and naphtha supplies have been secured at over 90% compared to peacetime levels.

Director Yang explained, "In May, we expect to import over 75 million barrels, over 60 million barrels in June, and over 70 million barrels in July." He added, "Most of the supply will come from Saudi Arabia, the United States, and the United Arab Emirates (UAE), in that order."

The government is currently working on bringing in the 24 million barrels secured as a result of the UAE special envoy's achievements, and is considering extending the crude oil stockpiling swap program until July. There are also ongoing efforts to extend support for the freight cost differentials to expand non-Middle East crude oil imports.

Regarding compensation for losses in the refining industry, the government reaffirmed its existing principle that "legitimate losses will be compensated 100%." Vice Minister Moon stated, "If a refiner calculates its losses through an accounting firm, the Settlement Committee, consisting of legal, accounting, and oil experts, will review and make a final decision," adding that, "We plan to form the Settlement Committee in May."

Meanwhile, regarding the "No. 1 Project" for investment in the United States, Vice Minister Moon said, "It is not a situation where I can predict or comment," and asked for understanding, stating, "Since it is a negotiation involving the other party (the United States), rather than confirming the facts, our position is that we cannot confirm anything."

On the Board of Audit and Inspection's criticism of the nuclear power plant export system, Vice Minister Moon said, "The direction of the Board of Audit and Inspection's comments and the direction the Ministry is taking are not different," and announced, "We will announce plans to improve the nuclear power plant export work system in the near future." However, he explained that since domestic nuclear power plant work and export work are divided between the Ministry of Climate, Energy, and Environment and the Ministry of Trade, Industry and Energy, measures will focus on matters under the jurisdiction of the Ministry of Trade, Industry and Energy.

Regarding labor-management conflicts at industrial sites, such as the Samsung Biologics strike and the announcement of a strike by the Samsung Electronics labor union, Vice Minister Moon said, "It is not appropriate to comment on specific companies' labor-management issues," but added, "AI transformation (AX) and manufacturing AX are not a choice but an essential and inevitable task." He emphasized, "Both labor and management must conduct negotiations with a shared understanding of maintaining industrial competitiveness and raising the country's potential growth rate."

Regarding the audit of Korea National Oil Corporation, Vice Minister Moon said, "The audit is currently in its final stages, so it is not appropriate to discuss details," and added, "As soon as the audit is completed, we will provide an explanation without delay." He confirmed that the Korea National Oil Corporation holds the priority purchase rights for joint stockpiled oil, but stated that any specific violations and their grounds would be explained after the audit results are announced.

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