South Korea will cap domestic fuel prices for the first time in nearly 30 years as the government moves to cushion the impact of surging global oil prices following the escalating conflict in the Middle East. President Lee Jae Myung announced the measure during an emergency meeting on the economic impact of the crisis, saying
South Korea will cap domestic fuel prices for the first time in nearly 30 years as the government moves to cushion the impact of surging global oil prices following the escalating conflict in the Middle East.
President Lee Jae Myung announced the measure during an emergency meeting on the economic impact of the crisis, saying authorities would introduce a maximum price system on petroleum products that have recently seen excessive price increases, according to Reuters.
The decision is aimed at limiting the economic shock in a country heavily reliant on imported energy, particularly supplies from the Middle East. “The current crisis is a significant burden on our economy, which is highly dependent on global trade and energy imports from the Middle East,” Lee said.
The move comes as global crude prices surged after geopolitical tensions in the region intensified, raising concerns about potential disruptions to oil shipments through the Strait of Hormuz, a key route that handles roughly 20% of the world’s oil supply.
Lee also said the government will explore alternative energy supply routes to reduce dependence on shipments passing through the strait. In addition, South Korea may expand its existing 100 trillion won (RM 264 billion) market stabilisation programme if financial volatility worsens. Authorities have also been asked to prepare additional measures to stabilise financial and foreign exchange markets.
South Korean markets reacted sharply to the developments. The country’s benchmark stock index fell 8% on Monday, triggering circuit breakers for the second time this month. The Korean won also weakened more than 1%, briefly approaching the psychological level of 1,500 won per US dollar before recovering slightly.
Rising crude prices have already begun affecting fuel markets worldwide. In Malaysia, the price of RON 97 petrol recently increased by 10 Sen, reflecting the impact of global oil volatility. While RON 95 remains subsidised at RM 1.99 per litre, authorities have cautioned that international market forces remain beyond the country’s control.
You can about how rising oil prices may affect Malaysian motorists in our earlier feature here.
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