Korea's Oil Price Ceiling System: Refineries Face KRW 1.5 Trillion Losses per KRW 100 Gap

The Korean government has calculated that refineries will incur losses of KRW 1.5 trillion for every KRW 100 gap in oil prices under the petroleum price ceiling system.

This estimate is based on a maximum price difference of KRW 200, according to data submitted by the Ministry of Trade, Industry and Energy (MOTIE) to Representative Cho Ji-yeon of the ruling People Power Party.

The government allocated KRW 4.2 trillion in targeted contingency reserves to compensate refineries for losses incurred from the implementation of the petroleum price ceiling system on March 13.