Seoul, March 13 (NationPress) - South Korea's Minister of Industry, Kim Jung-kwan, announced on Friday that the government's newly established fuel price cap system is beginning to show signs of price stabilization just hours after its launch.

Kim convened a meeting with representatives from South Korean oil refineries, gas stations, and the Korea National Oil Corporation to assess the domestic energy landscape as the fuel price cap system was implemented. This initiative, reported by Yonhap News Agency, aims to alleviate the burden of skyrocketing fuel prices on consumers by placing a ceiling on the prices that oil refineries can charge gas stations and distributors.

The initial limits were set at 1,724 won (approximately USD 1.16) per litre for regular gasoline, 1,713 won per litre for diesel, and 1,320 won per litre for lamp oil.

The government plans to adjust these maximum price levels every two weeks to align with fluctuations in international oil prices until domestic fuel prices are deemed stable enough to discontinue the system.

Following the meeting, Kim informed reporters that the market is already witnessing price reductions on the very first day of the system's activation, highlighting the cooperative efforts of gas stations and oil refineries with the new program.

Kim urged gas stations to comply with the system, emphasizing its importance in ensuring fair pricing as the caps are applied to the supply prices set by refiners, as noted by his office.

Additionally, Kim chaired an intergovernmental task force meeting focused on scrutinizing unfair market practices in fuel pricing.

"The fuel price cap system serves as a fundamental safeguard to protect our national economy during crises, not as a means to control the market," Kim stated, promising a rigorous response to any exploitative actions such as hoarding or price gouging.

The task force has conducted over 800 inspections on gas stations suspected of illicit practices and has identified 20 cases of illegal activities, according to the ministry.

In response to the petrochemical sector's challenges in sourcing naphtha amid the Middle Eastern crisis, Kim revealed that the government will impose restrictions on exports of domestically produced goods and may consider releasing naphtha reserves when the country taps into its strategic oil reserve.

Recently, Yeochun NCC Co., South Korea's leading ethylene producer, and other firms indicated potential "force majeure" scenarios, suggesting disruptions in naphtha supplies.

South Korea relies heavily on imports of naphtha via the Strait of Hormuz, which is currently facing significant disruptions due to ongoing tensions in the region.

Furthermore, the minister mentioned that the government is evaluating a range of tax measures to aid in energy price stabilization and is preparing to issue energy vouchers for vulnerable households.