KUALA LUMPUR - South Korea on Thursday announced higher price ceilings for domestic fuel products under a temporary price cap system to ease cost pressures caused by rising global oil prices.

The new price limits for petrol, diesel and lamp oil supplied to petrol stations have been set at 1,934 won, 1,923 won and 1,530 won per litre, respectively, according to the Trade, Industry and Resources Ministry.

The revised price caps will take effect from midnight and remain in place for two weeks.

These new limits are higher than the earlier caps of 1,724 won for petrol, 1,713 won for diesel and 1,320 won for lamp oil introduced two weeks ago.

The government has also added marine diesel to the price control list to help reduce costs for fishermen.

The fuel price cap system was first introduced on March 13, marking the first such measure since 1997, following a surge in oil prices after the United States and Israel launched airstrikes on Iran.

The conflict led to disruptions in global oil supply, including the closure of the Strait of Hormuz, a key shipping route.

Under the system, the government reviews and sets maximum fuel prices every two weeks based on global oil price movements.

With the new limits, fuel prices at petrol stations are expected to rise above 2,000 won per litre.

“While it is difficult to predict prices at gas station, final consumer prices are expected to be in the low 2,000 won range,” said Yang Gi Uk, the head of the ministry's office of industry, trade and resource security.

Officials said the price caps are expected to reduce petrol prices by about 200 won and diesel and kerosene prices by around 500 won compared to market levels without controls.

The government plans to remove the price caps once domestic fuel prices stabilise.

Authorities are also stepping up enforcement against unfair practices such as hoarding and price manipulation to prevent excessive price increases.

Yang said the government will monitor whether petrol stations raise prices quickly after the new caps take effect, noting that most stations hold between five days and two weeks of fuel supply.

Amid ongoing supply disruptions, the government has raised its resource security alert to Level 2 under its four-tier system.

South Korea also plans to release 22.46 million barrels of oil from its strategic reserves next month under an agreement with International Energy Agency members.