South Korea said late on May 21 local time that it would freeze government-imposed fuel price caps for a sixth consecutive adjustment period, underscoring the administration’s effort to contain inflation despite persistent upward pressure from global oil markets.
The Ministry of Trade, Industry and Energy said the ceilings, effective from midnight on May 22, would remain at about $5.25 a gallon for gasoline, $5.22 for diesel and $4.15 for kerosene based on refinery supply prices.
The caps have stayed unchanged since March 27, when authorities raised regulated fuel prices by roughly 57 cents a gallon across major fuel categories during the early phase of heightened volatility tied to Middle East tensions.
Officials acknowledged that accumulated upward pricing pressure remains because earlier adjustments did not fully reflect increases in international crude prices. According to the ministry, gasoline prices still carry unrealized upward pressure equivalent to roughly 75 to 90 cents a gallon, while diesel and kerosene face even larger deferred increases.
The government nevertheless opted to maintain current levels, arguing that stabilizing consumer prices and household finances remains a higher priority.
Authorities also announced plans to lengthen the fuel-price review cycle from every two weeks to every four weeks, citing calmer market conditions compared with the sharp swings seen earlier in the conflict.
Benchmark crude prices, including Brent and Dubai crude, have continued trading near $100 a barrel as negotiations involving Iran remain stalled and broader geopolitical uncertainty persists. Officials said price fluctuations have recently become more contained, reducing the need for rapid administrative revisions.
Retail gasoline and diesel prices in South Korea have also stabilized at slightly above $5.45 a gallon, according to government data released May 21 local time.
Yang Ki-wook, a senior ministry official, said the extended review cycle was intended to improve predictability for gas stations, consumers and commercial drivers while reducing speculative inventory adjustments caused by frequent pricing announcements.
The ministry said it would still retain flexibility to revise the caps ahead of schedule if conditions in the Middle East shift materially, including changes affecting shipping through the Strait of Hormuz.
Officials signaled the controls are likely to remain in place for now, saying discussions about ending the system would depend on crude prices easing closer to $90 a barrel and regional energy markets showing greater stability.
The government has earmarked roughly $3 billion in contingency funding on the assumption that the price-cap system remains in place for six months. While some market participants have warned that prolonged intervention could strain those reserves, officials dismissed concerns about near-term funding shortages.
The ministry also said it plans to finalize compensation guidelines for refiners affected by the controls by the end of May, with settlement payments expected to begin after July once accounting procedures are completed.
