South Korea Prepares for Oil Price Surge with 1.5 Trillion Won Compensation Plan

The South Korean government has calculated that oil companies will need 1.5 trillion won in compensation for losses incurred due to the petroleum price cap, which was implemented on March 13. This amount is allocated per 100-won gap between the market price and the government-set maximum price.

According to a report from Chosunbiz, the Ministry of Trade and Industry (MOTI) submitted materials to Rep. Cho Ji-yeon of the People Power Party, stating that the additional funds are in line with the National Assembly Budget Office's view that Korea should prepare for the possibility of crude oil prices surging to $150.

The government had previously set aside 4.2 trillion won in reserve funds to compensate oil companies for losses under the petroleum price cap. The MOTI received data from each oil company on losses incurred from March 13 to June 30 and plans to establish common standards through a meeting of the top settlement committee.