South Korea Prepares for $150 Crude Oil Price Surge with 1.5 Trillion Won Compensation
The South Korean government has calculated that oil companies will need 1.5 trillion won in compensation for losses incurred under the petroleum price cap, which is set at a maximum of every 100-won gap between the price without the cap and the government-set price.
This calculation comes after the government implemented the petroleum price cap on March 13, setting aside 4.2 trillion won in reserve funds for compensation. The Ministry of Trade and Industry received data from each oil company on losses incurred from March 13 to June 30 through a meeting held on the 30th of last month.
The ministry plans to establish common standards for settlement prices by considering each company's costs and reasonable margins, with the goal of finalizing settlement prices soon. The calculation is based on the National Assembly Budget Office's view that Korea should prepare for the possibility of crude oil prices surging to $150.