Korea keeps diesel export limits as prices spike

South Korea's industry ministry said Friday it will keep managing diesel export volumes within limits set against year-earlier levels, rejecting a newspaper report that refiners are being barred from a global diesel boom.

The Ministry of Trade, Industry and Energy said it would seek a reasonable way to manage export volumes in consultation with the industry as long as domestic supply and demand are not disrupted. It issued the statement a day after the World Daily reported that refiners were unable to take advantage of record diesel margins because of government export restrictions.

International diesel prices have climbed above 170 dollars a barrel, the ministry said, citing attacks on Russian refining facilities, the prolonged war between the United States and Iran and China's suspension of petroleum product exports.

Under the current rules, refiners may export up to 100 percent of their year-earlier monthly volumes under a domestic-supply-first principle, and exceptions above that level can be granted in consultation with the industry when needed. Refiners must also supply at least 90 percent of their year-earlier volumes to the domestic market.

The ministry said the measures are a minimal safeguard, reflecting uncertainty over crude oil imports tied to the Strait of Hormuz crisis and concern that dual pricing between export and domestic sales under the country's maximum price system could disrupt domestic supply. Securing stable diesel supply for industrial activity and household finances is the top priority, it added.

Refiners have asked for permission to export inventory volumes as long as domestic priority supply is not disrupted, according to the report the ministry was responding to.

The ministry said it is closely monitoring winter supply conditions and market developments at home and abroad.