Amid a trend of declining international fuel prices, the government has firm its resolve to maintain prices at their current levels. Effective from midnight on the 24th, the fourth adjustment of the petroleum price ceiling has fixed the prices of major fuels such as gasoline and diesel at their existing levels. Although there were voices expecting a price cut given that the global oil market is currently contracting, the government instead reflected concerns that a price reduction could lead consumers to use more fuel. This demonstrated its intention to curb energy demand and stabilize the market.
According to the Ministry of Industry and Trade, under this decision, the price of gasoline will remain fixed at 1,934 won per liter, diesel at 1,923 won, and kerosene at 1,530 won, identical to the levels set in the third price policy implemented on the 10th. The petroleum price ceiling system sets a maximum price limit for fuel supplied by oil refiners to gas stations and determines the maximum price every two weeks. While the second adjustment in January 13 initially introduced the system raised prices by 210 won per fuel type to reflect the rise in global oil prices, this time the government chose not to offset that increase and instead maintained the current status.
Like the third measure, this fourth adjustment does not reflect the rise in global oil prices. However, during the third measure, prices were frozen despite rising MOPS (Singapore International Petroleum Products) prices to alleviate burdens on the livelihood sector. In particular, the decision was made to mitigate difficulties in the real economy, such as freight transportation and agriculture/fishing, despite the potential for a significant rise in diesel prices. The background for this fourth adjustment is different. MOPS has fallen by 8% for gasoline, 14% for diesel, and 2% for kerosene over the past two weeks. If simple formulas were applied, gasoline prices would have needed to be reduced by about 100 won and diesel by about 200 won. However, the government prioritized the need for demand management amidst global oil price instability and supply-demand crisis situations. This result reflects the judgment that price reductions could instead spur expanded consumption.
President Lee Jae-myung stated during the State Council meeting on the 14th that there are reasonable arguments against the notion that lowering prices is always a good thing, noting that "it is not necessarily 100% a good thing to lower prices." The government maintains the stance that it does not blindly follow only the fluctuation rate of international oil prices when determining the maximum price. Nam Kyung-mo, Presidential Policy Advisor of the Ministry of Industry and Trade, explained in a briefing: "After considering consumption reduction, we also took into account the fact that the third decision did not fully reflect the increase in international petroleum product prices, the burden on ordinary citizens, price stability, and management of petroleum consumption."