President Lee Jae Myung has ordered an aggressive multi-agency response as international crude prices jump to multi-year highs and domestic fuel prices climb rapidly.
According to the Korea National Oil Corporation’s Opinet system, the nationwide average gasoline price reached 1,890.87 won per liter late Friday, while prices in Seoul — traditionally the most expensive market — have already climbed to around 1,942 won, placing the psychologically important 2,000-won level within reach.
The surge follows a sharp spike in global crude markets after the U.S.–Israeli strikes on Iran and the subsequent disruption to tanker traffic in the Strait of Hormuz, a shipping chokepoint that carries roughly one-fifth of global oil supply.
Brent crude and U.S. benchmark West Texas Intermediate (WTI) have surged to around $90 a barrel, with some analysts warning that $100 oil is increasingly possible if the conflict persists.
The rapid domestic price response has pushed the government to review a rarely used emergency measure — the designation of a maximum retail price for petroleum products under the Petroleum and Alternative Fuel Business Act.
The policy would allow the industry ministry to set a ceiling on gasoline prices if extreme market volatility threatens economic stability.
President Lee raised the possibility during an emergency Cabinet meeting on March 5.
“There has been no serious disruption to fuel supply, yet prices at gas stations suddenly surged,” Lee said, instructing officials to examine price control measures.
He later warned against what he described as “anti-social profiteering” exploiting the crisis.
The government has since launched a broad enforcement campaign targeting price collusion, hoarding, illegal fuel distribution and adulterated petroleum products, while the Fair Trade Commission is reviewing possible anti-competitive behavior among gas stations.
Facing growing political pressure, industry groups representing refiners, fuel distributors and gas station operators said they would cooperate with the government to slow the pace of price increases.
Refining margins and international benchmark prices have climbed sharply as tanker movements out of the Persian Gulf slow and war-risk insurance costs surge.
Energy analysts say the speed of domestic price transmission has been unusually fast during the current crisis, amplifying consumer anxiety.
Implementing a price ceiling however may not be easy.
The measure has not been used in practice since South Korea liberalized petroleum pricing in 1997, and economists warn that artificial price suppression could create unintended consequences.
If prices are capped below market levels, refiners and retailers could cut supply or delay shipments, potentially triggering fuel shortages.
The law also requires the government to compensate businesses for losses caused by price controls — a clause that could impose a substantial fiscal burden if high oil prices persist.
For that reason, policymakers are also reviewing alternative options, including expanding fuel tax cuts and releasing strategic oil reserves, before deciding whether to activate the emergency mechanism.
The fuel price surge in South Korea reflects a broader global shock.
In the United States, the average gasoline price climbed to $3.41 per gallon, up 14 percent in a week, according to AAA data.
The gains hinge on the duration of the conflict and the security of shipping routes through the Strait of Hormuz.
For South Korea — which imports nearly all of its crude oil and relies heavily on Middle Eastern supply — the crisis represents one of the most direct economic spillovers from the war.
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