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As gas surges past 1,800 won per liter with Iran war, president calls for cap

Published: 05 Mar. 2026, 19:08 Updated: 05 Mar. 2026, 19:10

Fuel prices are displayed at a gas station in Seoul on March 5. [YONHAP]

Gas prices soared past 1,800 won per liter ($4.60 per gallon) on Thursday, prompting President Lee Jae Myung to order the first price cap in about two years as the Iran war rages on, while the Ministry of Trade, Industry and Resources issued a "Level 1" resource security crisis alert.

The alert, the lowest of a four-tier system under Article 23 of the Special Act on National Resources Security, was announced after the government weighed the severity of the situation and its potential impact on people’s lives and the national economy.

Domestic gasoline prices jumped quickly after the United States and Israel struck Iran on Saturday, when the nationwide average price at the pump stood at 1,692.89 won per liter. By Thursday, the average rose to 1,834.32 won per liter, according to Opinet, the oil price information service run by the Korea National Oil Corporation.

The spike deviates sharply from relatively stable weekly averages throughout February in the 1,686 to 1,691 won range.

Seoul’s average prices climbed to 1,842.55 won per liter for gasoline and 1,804.05 won for diesel on Thursday. At another gas station in Jung District, central Seoul, gasoline was listed at 2,896 won per liter and diesel at 2,958 won.

The government is preparing for an elevated alert level with plans to exercise gasoline purchasing rights under international joint-stockpiling arrangements. Seoul will also draw up a release plan for its stockpile to be activated swiftly if the supply crunch worsens, addressing stockpile transfers, allocation criteria by sector and the timing of release.

It typically takes about two weeks for a rise in global oil prices to hit domestic pumps due to the lag involved in refining imported crude and distributing products. This time, however, retail prices appear to be rising even before crude supplies have been delivered.

"Fuel supply has not yet faced any serious disruptions, but prices at the pump have suddenly surged,” said President Lee in opening remarks at a Cabinet meeting he convened at the Blue House on Thursday morning. “I ask that we discuss concrete punitive measures.”

“We will consider designating a maximum retail price for fuel under Article 23 of the Petroleum and Alternative Fuel Business Act,” said Deputy Prime Minister Koo Yun-cheol at the meeting.

Fuel prices are displayed at a gas station in Seoul on March 2 [YONHAP]

The government response coincides with the seemingly widespread public sentiment in favor of additional measures.

When JoongAng Ilbo reporters visited a gas station in Gwanak District, southern Seoul, at 11 a.m. Thursday, drivers expressed anger at the sight that greeted them as they pulled up to fill up: 1,815 won per liter.

"The war just broke out, but gas prices are already soaring all of a sudden, and it makes my blood boil,” said a driver surnamed Yoon who came to fill up before fuel prices rise further. “Once they go up like this, they hardly ever come back down, and that makes me even angrier.”

Complaints among consumers revolved around the idea that refiners cite “higher procurement costs” and move more quickly than global trends when prices rise, but lower prices only gradually when global oil prices fall.

An aerial view of the Iranian shores and the island of Qeshm in the Strait of Hormuz on Dec. 10, 2023 [REUTERS/YONHAP]

The refining industry argues that heightened tensions in the Middle East and a pickup in domestic demand have pushed up retail prices.

“With the possibility of a closure of the Strait of Hormuz, competition has intensified to secure supply,” said a source from the refining industry. “A surge in consumer demand to fill up as soon as possible after the war also contributed to the price increases.”

At a gas station in Jung District, central Seoul, the manager said there was little room for choice. "Retail prices are decided by headquarters, so we don’t have any discretion."

The burden lands squarely on people whose livelihoods depend on fuel. A delivery driver surnamed Lee who visited the self-service station in Gwanak District on Thursday morning shook his head as he pumped gas into his 1-ton truck.

“If prices rise any further, it'll cost me another 100,000 won a month,” said Lee.

“People like me who drive for a living take a big hit,” said another delivery driver surnamed Jeong. “The government needs to step in and do something.”

Children wave the Palestinian national flag atop the rubble of a destroyed building at the Bureij camp for refugees in the central Gaza Strip on Sept. 22, 2025. [AFP/YONHAP]

This is not the first time refiners have been accused of raising prices by pointing to global instability. In October 2023, when uncertainty over global oil prices grew after fighting broke out between Israel and the Palestinian militant group Hamas, gasoline prices in Korea neared 1,800 won per liter.

At the time, then-Industry Minister Bang Moon-kyu convened an oil market inspection meeting on Oct. 18 aimed at stabilizing consumer prices and urged refinery executives to improve pricing practices, citing public criticism that domestic fuel prices move “quickly when rising and slowly when falling.”

Some say the same problem has returned in less than three years because the government failed to follow through.

A driver surnamed Kim pointedly criticized the authorities. “So far, the government has only talked about getting fuel prices under control, and hasn’t actually done it.”

The Trade Ministry announced Thursday that it will launch a special inspection of gas stations highly suspected of illegal fuel distribution through the Korea Petroleum Quality and Distribution Authority starting Friday, with a focus on cracking down on hoarding, refusing to sell and selling blended products that fail to meet distribution standards.

“The government should engage the refining industry and examine whether there are reasonable grounds for raising retail prices,” said Kim Tae-hwang, a professor of international trade at Myongji University. “It also needs to investigate whether there was collusion among refiners.”

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.
BY KIM YE-JUNG, LEE GYU-RIM, KIM MIN-YOUNG [[email protected]]