Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Gov't to implement price cap system for petroleum products this week
President Lee Jae Myung speaks during an emergency economic meeting on the Middle East situation at Cheong Wa Dae in Seoul, Monday. Yonhap
By Anna J. Park
Lee warns of stern punishment for illicit gains from market instability
The Korean government plans to introduce a temporary price cap on petroleum products as early as this week to curb surging fuel costs triggered by escalating tensions in the Middle East, the presidential policy chief said Monday. The system will allow the government to set an upper limit on retail fuel prices for a fixed period to prevent sharp spikes.
Presidential chief of staff for policy Kim Yong-beom said at a briefing that the government will work fast to complete administrative steps, including issuing a ministerial notice, so the cap could take effect within days.
He said officials had discussed detailed measures to prevent abnormal pricing of petroleum products and improve price predictability in the market, adding that the Ministry of Trade, Industry and Resources will move quickly to finalize procedures needed to introduce the system.
Earlier Monday, President Lee Jae Myung convened an emergency economic meeting and ordered the immediate introduction of the price cap, along with a crackdown on price manipulation, to shield the public from economic fallout linked to the Middle East crisis. Lee called for strict enforcement against illegal practices in the domestic oil market, including collusion among refiners and gas stations, hoarding and speculative stockpiling.
“If violations occur, severe penalties amounting to several times the profits gained from such actions should be imposed,” said Lee, warning that attempts to profit illegally from the crisis would face strong punishment.
The president also instructed officials to secure alternative energy supply routes in cooperation with strategic partner countries, as Korea remains heavily dependent on energy imports from the Middle East.
“In cooperation with our strategic partner countries, we should swiftly identify alternative supply routes that do not pass through the Strait of Hormuz,” Lee said during the meeting.
The policy chief explained that discussions with partner countries on such measures are already underway, although specific details could not be disclosed at this stage.
Warning that prolonged instability in the Middle East could have significant spillover effects on the real economy, Lee urged the government to prepare comprehensive contingency plans using all available policy tools.
To address potential volatility in financial and foreign exchange markets, Lee instructed authorities to closely examine hidden risks and prepare detailed response measures. If necessary, the government may expand the existing 100 trillion won ($75 billion) market stabilization program and coordinate additional steps with the central bank.
Lee also vowed strict punishment for any groups attempting to exploit market instability for unfair gains.
“In particular, we must deal sternly with those who attempt to exploit the difficult market environment to gain unfair profits,” he said, adding that the crisis should also serve as “an opportunity to accelerate reforms aimed at strengthening the structural resilience of our capital market.”
“Crisis can also be an opportunity,” he said. “Ultimately, what matters is how well we prepare and respond.”