Home > National > Politics

President Lee orders fuel price cap amid volatility due to Middle East crisis

Published: 09 Mar. 2026, 19:28 Updated: 09 Mar. 2026, 20:03

SARAH KIM
[email protected]

President Lee Jae Myung, third from right, speaks during an emergency economic response meeting assessing the Middle East crisis at the Blue House in central Seoul on March 9. [JOINT PRESS CORPS]

The Korean government is set to implement a fuel price cap as early as this week, the Blue House said Monday, setting a maximum for gasoline, diesel and other fuels amid volatilities due to the Middle East crisis.

In an interagency meeting to assess the latest situation following the U.S.-Israeli strikes on Iran, President Lee Jae Myung called for authorities to "swiftly" introduce a cap on local fuel prices to deal with recently surging prices.

"Corresponding emergency measures are necessary given the severity of energy supply and price instability," Lee told officials at the Blue House in Seoul, calling on authorities to "swiftly introduce and boldly implement a maximum price system for petroleum products, which have recently seen excessive price increases."

If implemented, this would mark the first time in nearly 30 years that Korea has implemented the system, in keeping with the Petroleum and Alternative Fuel Business Act.

Lee also called for a thorough crackdown on "illegal activities such as collusion, hoarding and speculation among refineries and gas stations, and impose strict sanctions equivalent to several times the profits earned by violators."

Kim Yong-beom, presidential chief of staff for policy, gives a briefing on the presidential meeting on the response to the Middle East crisis at the Blue House in central Seoul on March 9. [JOINT PRESS CORPS]

Kim Yong-beom, presidential chief of staff for policy, said in a briefing later on Monday that the government will expedite relevant procedures related to the rise in oil prices due to the Middle East crisis, including the implementation of a price cap system, to ease the burden on the public within the week.

"The government is paying particular attention to the asymmetry between refineries and gas stations, which raise prices quickly and then lower them slowly," Kim told reporters.

Kim said the Ministry of Trade, Industry and Resources plans to expedite related procedures, including the issuing of a public notice, so that the price cap can be implemented based on the petroleum business law. This allows the industry minister to designate a maximum sales price to deal with steep oil price fluctuations, which last happened in 1997.

He added that the maximum price will be set every two weeks.

Kim said the potential impact of a closure of the Strait of Hormuz stands at around 1.7 million barrels per day, noting that Korea's oil reserves amount to some 190 million barrels, sufficient to last about 208 days.

The president-led emergency meeting on the Middle East crisis was attended by key economic aides, including Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol and Industry Minister Kim Jung-kwan.

To prepare for a possible prolonged situation, the government has decided to review pursuing measures such as exercising preferential purchasing rights for joint reserves with oil-producing countries, which could secure some 20 million barrels of crude stock. It also plans to seek alternative sources of energy supply beyond those shipped through the Strait of Hormuz and secure overseas production by the state-run Korea National Oil Corp. for domestic use.

Lee also urged the government and the Bank of Korea to expand a 100 trillion won ($66.8 billion) market stabilization program if needed to prepare for volatility in financial and foreign exchange markets.

On the recent instability in financial market indicators, including stock prices and exchange rates, policy staffer Kim said that the government is "closely examining the impact of rising oil prices on the industry and financial markets, scenario by scenario," and said he believes it has "sufficient capacity to respond."

BY SARAH KIM [[email protected]]