Refiners under pressure not to raise fuel prices

Director General of Bureau of Resources Industry Policy at Ministry of Trade, Industry and Energy Yu Beop-min, center, speaks during a meeting with oil industry officials at the headquarters of Korea Petroleum Association in Seoul, Friday. Courtesy of Ministry of Trade, Industry and Energy

By Kim Jae-heun

Local refiners are under pressure to join government efforts to stabilize fuel prices amid its decision to extend the petroleum tax reduction period until the end of October, an industry official said, Friday.

The Ministry of Trade, Industry and Energy held a meeting with officials from oil refiners to check fuel market trends at the headquarters of the Korea Petroleum Association in Yeouido, Seoul.

“As the government has decided to extend the tax cut period until October to reduce the nation's burden, we ask the companies to work with us in stabilizing domestic fuel prices ― particularly, by not raising them more than the recent increased rate of international petroleum,” Yu Beop-min, the ministry's director general of the bureau of resources and industry policy, said.

Yu added that the government will continue to closely monitor fuel prices until they stabilize in the future. He also requested cost-effective gas station operators to “play a more leading role in stabilizing fuel prices.”

“Refiners and gas station operators will take the government's request without much resistance as they can lower fuel prices in accordance with tax reduction. It is a matter of paying more tax or not,” a local refiner official said.

On Wednesday, Deputy Prime Minister and Finance Minister Choo Kyung-ho revealed that the government will extend the deadline for the petroleum tax cut period for two more months.

In addition, the Ministry of Economy and Finance forecasted legislative amendments to the Enforcement Decrees of the Transportation, Energy and Environment Tax Act and the Enforcement Decree of the Individual Consumption Tax Act. As a result, the price of gasoline, diesel and LPG butane will be lowered by 205 won (15 cents), 212 won and 73 won per liter, respectively, until October.

Dubai crude oil, the standard for imported petroleum prices, has surpassed $80 per barrel as of August.