First downward adjustment 106 days after system introduction... Gasoline 1,784 won·Diesel 1,773 won
2-3 week gap until gas station retail prices decline... Government intensifies crackdown on gas station profiteering
International oil prices return to pre-war levels... Outlook for downward adjustment in maximum oil prices
As international oil prices have fallen to pre-Middle East war levels, the government is reviewing plans to lower the maximum oil price to ease the burden on ordinary citizens' finances. According to the Ministry of Industry and Trade on the 26th, as of 8 a.m. the previous day, the Brent crude futures price was $73.14 per barrel, virtually recovering to pre-war levels ($72.48 per barrel). The photo shows a gas station in downtown Seoul on that day. 2026.6.26 ryousanta@yna.co.kr
The government is reducing the 7th maximum oil price, effective from 0:00 on the 27th, by 150 won per liter (L).
This is the first downward adjustment 106 days after the oil maximum price system was introduced on March 13th. Accordingly, gas station fuel prices are expected to fall from the 2,000 won range to the 1,800 won range.
The Ministry of Industry and Trade announced on the 26th, "We have decided to reduce the 7th maximum oil price by 150 won per liter starting from 0:00 on the 27th."
Accordingly, the 7th maximum oil price has been set at 1,784 won for gasoline, 1,773 won for diesel, and 1,380 won for kerosene per liter respectively.
The maximum oil price places a ceiling on the supply price that refineries provide to gas stations. Gas stations then add taxes, distribution costs, and margins to determine the final consumer price.
Since the system was implemented on March 13th, the maximum price was upwardly adjusted by 210 won per liter for each fuel type during the second adjustment on the same month's 27th, and then remained frozen four consecutive times through the 6th adjustment.
With high ex-refinery prices of 1,934 won for gasoline and 1,923 won for diesel being maintained for nearly three months, actual consumer prices at gas stations remained stubbornly in the 2,000 won range.
However, with the maximum oil price now being reduced by 150 won each, gas station retail prices are expected to fall to the 1,800 won range.
The government has played its first reduction card since introducing the system because international oil prices have stabilized at pre-Middle East war levels.
Following the recent signing of a ceasefire memorandum of understanding (MOU) between the United States and Iran, concerns about Middle East supply disruptions have been greatly alleviated, with increased tanker transit through the Strait of Hormuz.
Under this influence, international oil prices have fallen to the low-to-mid 70 dollar per barrel range. International petroleum product prices have also plummeted compared to earlier this month, providing sufficient incentive to reduce the maximum price.
Above all, the government has prioritized domestic price stability in implementing this measure. The strategy is to proactively lower fuel prices, which have the most direct impact on ordinary citizens' finances, to reduce upward pressure on prices.
However, it is expected that there will be some time lag before this reduction is reflected in gas station retail prices.
Since gas stations typically receive product supplies at 2-3 week intervals, they must first sell through expensive inventory from the previous stage before they can lower prices. In other words, there could be a time lag of up to 3 weeks before gas station retail prices decline.
There are also concerns that gas stations, which used to raise prices at "light speed" when international oil prices rose, might revert to their chronic habit of slowing down to a "turtle's pace" when lowering prices.
The government has decided to crack down intensively on gas stations to prevent such intentional delays and ensure the public quickly feel the effects of the maximum price reduction.
A Ministry of Industry official stated, "The government, consumer groups, and public institutions will jointly conduct intensive monitoring of prices and quantities at approximately 10,000 gas stations nationwide and implement high-intensity on-site inspections through the 'Pan-ministerial Market Inspection Team' to identify and strictly address illegal gas stations."
The 7th maximum price announced this time will apply for the next four weeks, and the government plans to flexibly operate the adjustment cycle according to future developments in the Middle East situation and domestic and international oil price trends.
changyong@yna.co.kr
