The government said it estimates diesel prices could have surged to about 2,800 won per liter without a cap on petroleum product prices, and it is considering introducing administrative fines to punish market disruptions such as hoarding.
Officials said the risk of further inflation remains high as higher global oil prices, driven by uncertainty from the Middle East war, could feed into domestic prices with a lag.
The government discussed its assessment and response plan at a meeting of the “Special Task Force of Related Ministers for Livelihood Price Management,” chaired by Deputy Prime Minister and Minister of Finance and Economy Koo Yun-cheol, held on the 7th at the Government Complex Sejong.
The government said April consumer inflation came in at 2.6%, with a sharp rise in petroleum-related prices leading the increase after the Middle East war. Petroleum product inflation jumped to 21.9% in April from 9.9% in March, while inflation excluding petroleum products stayed around 1.8%.
Officials said policy measures such as the price cap and fuel tax cuts absorbed much of the upward pressure. They estimated that without the price cap, overall inflation would have been 2.8% in March and 3.8% in April — 0.6 percentage points and 1.2 points higher than the official figures.
A finance ministry official said figures presented by the Energy and Oil Market Monitoring Team suggest gasoline could have risen into the 2,200-won-per-liter range and diesel to more than 2,800 won per liter without government controls.
The government also said Korea’s inflation has been relatively stable compared with major countries, noting that many advanced economies have recorded inflation in the mid-2% to low-3% range and that domestic oil prices have risen more slowly than in key peers.
Japan, Hungary and Poland are using tougher measures such as price ceilings or subsidies for refiners, while major European countries are combining fuel tax cuts with market inspections, the government said.
Going forward, officials said they will focus on stabilizing petroleum prices by stepping up on-site inspections at gas stations and crackdowns on hoarding, while also managing supply and demand through steps such as securing alternative crude supplies and rotating vehicle use at public institutions.
The government said it will also swiftly execute 6.1 trillion won in high-oil-price relief funds and fuel-cost support for agriculture, fisheries and transportation, and expand measures to ease household costs, including discounts of up to 50% on farm, livestock and fishery products and broader discounts on processed foods.
To strengthen market order, officials said illegal acts such as hoarding can be punished by up to three years in prison or a fine of up to 100 million won, along with confiscation and forfeiture, and that the government will review introducing administrative fines to enable faster penalties.
A finance ministry official said the law already provides a basis to confiscate or forfeit related goods in hoarding cases, and added that the government will quickly review the administrative-fine measure mentioned by the president at a Cabinet meeting.
* This article has been translated by AI.
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