Seoul Gas Prices Nearing 2,000 Won Mark; Government to Revamp Station Pricing System

The burden of rising oil prices due to the prolonged international war is increasing, pushing gasoline prices in Seoul close to 2,000 won per liter. At a gas station in Gangnam, Seoul, gasoline is already nearing 2,500 won per liter, and diesel has surpassed 2,200 won. Eleven days have passed since the second notification of maximum oil prices took effect.

The observation that oil prices rise rapidly but fall slowly has been a persistent issue. The structural cause identified has been the retrospective settlement system. Under the current practice, gas stations receive fuel from refiners at a provisional price and settle the difference about a month later when refiners confirm the final price based on international oil rates. This system makes it difficult for gas stations to proactively lower prices when international oil costs decrease because they cannot ascertain the supply price beforehand, leading them to conservatively maintain higher profit margins.

To rectify this pricing structure, the government and ruling party have decided to abolish the retrospective settlement system in principle and shorten the settlement cycle to within one week. Furthermore, gas stations' freedom to choose suppliers will be expanded. While gas stations affiliated with major refiners like SK, S-Oil, Hyundai Oilbank, and GS have traditionally handled only their brand's fuel, they will now be allowed to select products from other refiners for up to 40% of their supply volume.