A sign with gas prices is displayed in a gas station in Seoul, Oct. 13.YONHAP
The refining industry is warning of a possible November supply crunch as Middle East tensions drag on, but the government says crude oil and naphtha supplies are sufficient for now.
A global diesel shortage continues, but Korean refiners are importing crude at about last year’s levels and keeping their refineries running, which makes an immediate shortage unlikely, the government said.
“Crude oil import volumes for October and November have been secured at more than 100 percent of last year’s average,” the Ministry of Trade, Industry and Resources said on Tuesday.
Naphtha supplies for October have also been secured at more than 100 percent of expected demand, while November supplies are at around 100 percent, the ministry said.
Concerns have grown in parts of the refining and energy industry that escalating conflict in the Middle East could disrupt imports of crude oil and petroleum products.
The Trade Ministry, however, said there has been no disruption to domestic supplies of crude oil or naphtha so far.
The impact of the global diesel shortage on the Korean market is also expected to be limited.
“Korea imports crude oil, refines it into petroleum products and consumes about half domestically while exporting the other half,” a Trade Ministry official said. “Refiners are bringing in crude at about last year’s level and operating their facilities, so there is no problem in terms of supply volumes.”
The government also said higher international diesel prices are not being passed directly on to Korean consumers because a government-managed price ceiling on petroleum products is currently in place.
U.S. and Iranian flags are seen behind oil barrels in this illustration created on March 23.REUTERS/YONHAP
The ministry has kept the petroleum price ceiling unchanged from the previous round for the 10th pricing period, which began Sept. 19 and runs for four weeks for each period.
The ceilings are 1,784 won per liter ($5.00 per gallon) for gasoline, 1,773 won for diesel and 1,380 won for kerosene.
The government is scheduled to announce its 11th round of maximum prices on Friday.
Domestic gasoline prices under the price-cap system are 9.69 percent higher than before the outbreak of the Middle East war, while diesel prices are up 15.36 percent, according to the Trade Ministry.
Over the same period, gasoline prices in the United States rose 46.17 percent, and diesel prices climbed 66.67 percent.
The government said the price ceiling has helped prevent the full increase in international oil prices from being passed on to domestic consumers.
The ministry was cautious, however, about whether the maximum prices could be adjusted in the next round.
“It is difficult to say prematurely,” a Trade Ministry official said. “We need to take into account the overall impact on the economy, supply conditions and oil prices.”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
