As of 9 a.m. on the 13th, the nationwide average gasoline price was 1,883.79 won per liter, down about 15 won from the previous day, the Korea National Oil Corp.’s Opinet price information system said.
Diesel averaged 1,911.1 won per liter, down about 21 won. Diesel remained more expensive than gasoline.
Prices in Seoul also declined. Average gasoline in the capital fell about 21 won to 1,906.40 won per liter, while diesel dropped about 30 won to 1,905.53 won.
The government began the oil price cap system at midnight on the 13th, setting maximum supply prices from refiners at 1,724 won per liter for regular gasoline, 1,713 won for automotive diesel and 1,320 won for kerosene. Premium gasoline, which has a limited consumer base, was excluded. The government said it will reset the caps every two weeks after reviewing the Middle East war and oil price trends.
To guard against possible supply shortages after the cap, the government said it will also issue a notice banning hoarding. It plans to step up nationwide monitoring of gas station prices and intensively inspect suspected market-disrupting practices.
To compensate refiners for losses caused by the cap, the government said it has prepared a post-settlement system. If refiners incur losses under the cap, it plans to reimburse them quarterly through a “maximum price settlement committee” made up of oil experts, including accounting, legal and academic specialists.
Loss estimates calculated by each refiner would be verified by an accounting firm and finalized by the committee. The government noted that when oil prices are falling, refiners could also see periods of profit because of the cap, and said it will conduct detailed post-settlement calculations of profits and losses.
The government again stressed the cap is aimed at stabilizing the market rather than imposing artificial price controls. However, controversy has grown after one refiner announced it would apply a post-settlement method for gas stations by splitting calculations into periods before and after the 13th, instead of using a monthly average price.
The gas station industry says stations that bought inventory at higher prices before the cap cannot sell it above the now-public supply prices, forcing them to absorb losses.
Loss estimates calculated by each refiner would be verified by an accounting firm and finalized by the committee. The government noted that when oil prices are falling, refiners could also see periods of profit because of the cap, and said it will conduct detailed post-settlement calculations of profits and losses.
The government again stressed the cap is aimed at stabilizing the market rather than imposing artificial price controls. However, controversy has grown after one refiner announced it would apply a post-settlement method for gas stations by splitting calculations into periods before and after the 13th, instead of using a monthly average price.
The gas station industry says stations that bought inventory at higher prices before the cap cannot sell it above the now-public supply prices, forcing them to absorb losses.
International oil prices, meanwhile, climbed back above $100 a barrel after Ayatollah Seyyed Mojtaba Khamenei declared a hard-line response toward the United States and Israel, including a possible closure of the Strait of Hormuz. On March 12 local time, ICE Futures Europe settled May Brent crude at $100.46 a barrel, up 9.2% from the previous session.
On the New York Mercantile Exchange, April WTI settled at $95.73 a barrel, up 9.7%. Analysts have warned that if the Middle East war drags on and high oil prices persist, the impact of the price cap could be reduced.
On the New York Mercantile Exchange, April WTI settled at $95.73 a barrel, up 9.7%. Analysts have warned that if the Middle East war drags on and high oil prices persist, the impact of the price cap could be reduced.
* This article has been translated by AI.
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