Industry ministry to maintain oil supply measures amid Middle East instability

The industry ministry said it will maintain petroleum-supply stabilization measures until the situation in the Middle East stabilizes, citing a sharp rise in international crude prices and disruptions to crude supply caused by the continuing war.

The Ministry of Trade, Industry and Energy introduced the measures on March 13. The package includes a price ceiling for domestic petroleum products, a ban on hoarding and a limit on gasoline, diesel and kerosene exports of no more than 100 percent of the volume shipped in the corresponding month a year earlier. The ministry said it has managed domestic petroleum-product prices and supply stably through the measures.

The ministry's statement followed a Chosun Ilbo article on Aug. 10 that reported calls from Japan and Australia for South Korea to expand petroleum-product exports. The report said refineries had been slow to restore operating rates because of weak domestic demand and export restrictions. From April through June, domestic demand for gasoline, diesel and kerosene fell 11 percent from a year earlier, while exports declined 23.4 percent, it said. Industry participants said, "With domestic prices capped by the price ceiling, export restrictions should be eased so refiners can recoup their losses."

For March through June, the ministry said export volumes for the fuels were 78.7 percent of the volume shipped in the same period a year earlier, while the value of those shipments rose 45.4 percent from a year earlier.

Refinery operating rates had fallen as crude supply declined but approached usual levels in July and August, the ministry said.