Industry ministry rejects claims fuel cap spurred gasoline demand

The industry ministry on Tuesday dismissed media reports claiming its fuel price cap system has artificially suppressed market signals and encouraged excessive gasoline consumption. Officials stated that actual retail sales data shows a decline in both gasoline and diesel usage since the measure took effect.

Total retail sales at gas stations from the second week of March through August fell 2.1 percent for gasoline and 8.4 percent for diesel compared with the same period a year earlier. July alone saw a year-on-year drop of 2.2 percent in gasoline sales and 8.6 percent in diesel sales.

The statement addressed a Chosun Ilbo article which argued that the government had grown complacent in managing demand while shielding consumers from global price shocks. The newspaper reported that gasoline consumption hit an all-time high for July and suggested that the price ceiling removed incentives for energy conservation during what it described as an oil-shock-level crisis.

Officials clarified that current gasoline prices are 10 percent above levels seen before the Middle East conflict and 12 percent higher than the same week last year. Diesel prices have risen 16 percent since before the conflict and stand 21 percent above their level a year ago, with gasoline reaching 1,859 won per liter in the second week of September.

The ministry also defended its support for livelihood-focused consumers, rejecting claims that the policy had abandoned truck drivers and small business owners in favor of general passenger car users. Since March, the government has increased the subsidy rate for diesel fuel costs borne by the freight and transport industries from 50 percent to 70 percent for amounts exceeding 1,700 won per liter, up to a limit of 280 won per liter.

Regarding the surge in international air travel cited in the critical report, the government emphasized that jet fuel is not subject to the maximum price system and continues to trade at market rates. The increase in international passengers in August was attributed to the broader recovery of the aviation industry.

The industry ministry affirmed it would continue to prioritize stability for households and closely monitor supply conditions under the resource security alert system.