SEOUL – In a decisive move to shield households from persistent inflationary pressures, the South Korean government announced on Thursday a comprehensive package of measures, including freezing oil price caps, expanding fuel tax cuts for liquefied petroleum gas (LPG), and injecting subsidies into the food sector.
Stability in Energy Costs
The Ministry of Trade, Industry and Energy confirmed that the "4th Maximum Petroleum Price Designation" will take effect at midnight on April 24. Under this mandate, the price ceilings for gasoline, diesel, and kerosene will remain at 1,934 won, 1,923 won, and 1,530 won per liter, respectively.
This marks the third consecutive freeze of these price caps. While international oil prices have shown a slight downward trend recently, government officials cited the ongoing volatility in the Middle East as a primary reason for maintaining the current ceilings to prevent sudden domestic price shocks.
Furthermore, the government is ramping up support for LPG users. From May 1 to June 30, the fuel tax discount for LPG butane will be significantly increased from 10% to 25%. This adjustment is expected to lower the price by approximately 51 won per liter, providing much-needed relief for taxi drivers and small business owners who rely heavily on the fuel.
Aggressive Intervention in Food and Construction
To stabilize "dining table inflation," the government will allocate 32 billion won between April and June to support discounts of up to 50% on essential agricultural, livestock, and fishery products.
Strategic supply management is also on the agenda:
Rice: 50,000 tons of government-reserved rice will be released if market instability persists.
Poultry: Import volumes for eggs and chicken will be expanded to meet domestic demand.
The stabilization efforts extend to the construction sector, which has been hit by rising material costs. The government plans to reflect updated material prices in public construction contracts and adjust the timing of non-urgent public projects to manage demand effectively.
Cracking Down on Market Distortion
A significant portion of the meeting, chaired by Finance Minister and Deputy Prime Minister Koo Yun-cheol, focused on "fair market order." The government warned of a zero-tolerance policy toward habitual price-fixing and collusion.
"We will push for strengthened sanctions against repeat offenders of collusion, including the cancellation of business registrations and operations suspensions, in addition to increased fines," Minister Koo stated during the Task Force meeting at the Seoul Government Complex. The scope and duration of restrictions on participating in public tenders for such companies will also be expanded.
The Road Ahead
As global economic uncertainty lingers, the South Korean government appears committed to a multi-pronged approach: direct price controls, fiscal subsidies, and strict regulatory oversight. Minister Koo emphasized that the administration would "continue to implement all available measures to alleviate the burden on citizens' livelihoods."
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