SEOUL — The South Korean government announced a decisive reduction in the maximum price caps for petroleum products, effective from midnight on June 27. This measure, marking the seventh adjustment of its kind, lowers the ceiling for gasoline, diesel, and kerosene by 150 won per liter, reflecting the significant decline in international oil prices following the recent diplomatic breakthrough between the United States and Iran.

Under the new policy, the maximum supply prices for refineries have been adjusted to 1,784 won per liter for gasoline, 1,773 won for diesel, and 1,380 won for kerosene. Government officials project that this downward adjustment will effectively bring retail gasoline prices at gas stations across the nation from the low 2,000 won range down to the 1,800 won level.

This shift in energy policy is a direct consequence of the de-escalation of geopolitical risks in the Middle East. Following the signing of a memorandum of understanding (MOU) to end hostilities between Washington and Tehran, fears regarding energy supply disruptions have largely subsided. The reopening of the Strait of Hormuz to maritime traffic has bolstered global supply stability, contributing to a sharp contraction in international benchmarks.

As of June 25, Brent crude plummeted to 75 dollars per barrel, a significant retreat from the 95 dollars recorded in the first week of June. Similarly, Dubai crude experienced a steep decline from 94 dollars to 64 dollars within the same period. Refined petroleum product prices have also demonstrated a stabilizing trend, with gasoline falling from 116 dollars per barrel to 97 dollars.

The current price caps will remain in effect for the next four weeks. However, the Ministry of Trade, Industry and Energy noted that the duration may be subject to change depending on future developments in Middle East stability and broader fluctuations in global oil markets.

While the government anticipates immediate relief for consumers, officials acknowledged that it may take some time for the price cuts to reach local gas stations as they exhaust existing inventory purchased at higher rates. To ensure the policy’s effectiveness, the Ministry plans to launch a strict monitoring campaign.

"The government, in collaboration with consumer advocacy groups and public institutions, will maintain intensive surveillance over sales prices and supply volumes at approximately 10,000 gas stations nationwide," a Ministry spokesperson stated. "We will deploy a cross-ministerial market inspection team to conduct rigorous on-site checks, and we intend to take stern action against any gas stations found to be intentionally delaying price reductions under the guise of inventory management."

This initiative is part of a broader government strategy to stabilize domestic inflation, with authorities pledging to mobilize all available resources to keep consumer price growth within the three percent range for the second half of the year. By actively managing essential living costs, the government aims to alleviate the financial burden on households and small business owners struggling with the prolonged period of high fuel costs.

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