Hormuz fees to raise pump prices by only 0.5%: Gov't

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Hormuz fees to raise pump prices by only 0.5%: Gov't

Published: 09 Apr. 2026, 19:00 Updated: 09 Apr. 2026, 20:11

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

Diesel price shows at 2,098 won per liter ($5.36 per gallon) at a gas station in downtown Seoul on April 9. It marks the first time in three years and eight months that Seoul's average diesel price has breached the 2,000-won threshold since Aug. 4, 2022 in the wake of Russia’s invasion of Ukraine. [NEWS1]

Korea predicts that even if Iran imposes a transit fee on the Strait of Hormuz, the effect on domestic fuel prices will likely remain marginal at around 0.5 percent, or under 1 percent at most.

“Crude oil is currently trading at around $90 to $100 per barrel. Should a transit toll be levied, prices might rise to roughly $101 per barrel — a one percent increase,” said Yang Ki-wook, Director-General of the Office of Industry, Trade and Resource Security at the Ministry of Trade, Industry and Energy, during a Thursday press briefing.

“Considering that roughly half of domestic gasoline prices are composed of taxes, a one percent uptick in crude prices could translate to only a 0.5 percent increase at the pump,” he added, noting that even accounting for additional factors, the overall effect would likely remain near 1 percent.

However, Yang cautioned that both the likelihood of the toll being imposed and the specific terms of any such levy remain uncertain.

“It still remains uncertain whether Iran will actually levy such fees, how the international community would respond, or whether any payment request would be directed at Korea,” he added.

Korea has also opted to keep its fuel price caps — 1,934 won per liter ($4.94 per gallon) for gasoline, 1,923 won per liter for diesel and 1,530 won per liter for kerosene — at the levels set two weeks earlier, as domestic prices for petroleum products, including diesel, continue their uphill march.

Set to take effect at 12 a.m. on Friday, the third round of price ceilings will last for two weeks.

“The prices of international petroleum products rose over the past two weeks, but plunged sharply following the April 8 cease-fire announcement, significantly amplifying volatility,” said Yang, adding that diesel prices in particular have surged by more than 15 percent.

“But we decided to hold the ceiling unchanged this time, considering its proximity to everyday living costs,” Yang added. “Diesel, in particular, is widely used by livelihood-dependent groups, including truck drivers, delivery workers, farmers and fishermen.”

The cap applies specifically to wholesale prices from refineries, and gas station operators could adjust prices based on supply prices.

Dubai crude, which had settled at $121.86 a barrel on April 7, tumbled by nearly 17 percent in a single session to close at $101.20 on April 8, after news of the two-week cease-fire.

The reprieve, however, proved fleeting, with prices rebounding on April 9 by around 2 percent.

Bottles of acetone line the shelves of a chemical supply shop in downtown Seoul on April 8. Prices of acetone have nearly doubled as the conflict in the Middle East unsettles domestic supplies of crude oil and naphtha. [NEWS1]

In fact, the average price of diesel in Seoul had climbed to 2,005.56 won per liter as of 4 p.m. Thursday, up 10.86 won from the previous day, while the highest-priced station posted a rate of 2,480 won, according to Opinet, the state-run fuel price information system.

It marks the first time in three years and eight months that the city’s average diesel price has breached the 2,000-won threshold since Aug. 4, 2022, in the wake of Russia’s invasion of Ukraine. The nationwide average diesel price rose 8.18 won to 1,977.76 won per liter.

Retail fuel prices in Korea typically reflect shifts in global crude markets with a lag of two to three weeks, suggesting that the upward trajectory could persist for the time being.

Seoul’s average gasoline price, which had already surpassed the 2,000-won mark per liter on April 7, was tallied at 2,021,59 won, up 8.20 won from a day earlier. The nationwide average stood at 1,984.89 won per liter.

“The third-round price freeze is estimated to exert a suppressive effect of roughly 300 won per liter for diesel, 100 won for kerosene and 20 won for gasoline,” Yang said.

The government is also working to secure alternative crude supplies for July.

It has already procured 50 million barrels of crude for April and 60 million barrels for May through routes that bypass the Strait of Hormuz — equivalent to roughly 60 percent and 70 percent, respectively, of the typical monthly import volume of 80 million barrels.

In total, 17 countries have been tapped as alternative crude suppliers, including Saudi Arabia, the United States, the United Arab Emirates, Brazil, Australia, Congo, Gabon and Canada.

“Crude produced overseas by the Korea National Oil Corporation will be redirected for domestic use; about 2 million barrels have been secured so far, and efforts are underway to obtain additional volumes,” he added.

BY SARAH CHEA [[email protected]]