Topic
Government ceilings, caps, subsidies and tax measures applied to retail prices of gasoline, diesel and kerosene.
South Korea held its gasoline price cap at 1,784 won a liter for a fourth straight period, with Brent at $105.90. Industry estimates put refiners' losses at 7 trillion to 8 trillion won, above the 5.6497 trillion won budgeted.
Perspective Coverage
3 publishersReality
South Korean gasoline sales rose 2.97% in September, the first annual increase since March, even as the gasoline fleet was 0.7% smaller in August. Seoul's fuel price cap is the leading explanation, but calendar and discount effects in the same month keep the data from sizing its role.
Reality
South Korean consumer prices rose 2.9% in September, a pace 0.4 points faster than August once last year's telecom-discount base effect is removed. Core inflation is at about its highest this year, and the Bank of Korea sees October near 3%, against a 2% target.
Perspective Coverage
4 publishersReality
Korean refiners lost 5 trillion won under the government's oil price cap through June, above the 4.2 trillion won in contingency funds allocated for it. Whether the state budget or the refiners' own books carry the 800 billion won shortfall decides if the cap is a fiscal problem or an earnings one.
Reality
WTI at about $102 has widened the gap between Singapore product prices and the capped price Korean refiners may charge at home. The industry puts its losses at 5 trillion won. No first settlement has been completed.
Reality
The trade ministry summoned Korea's four refiners on the 14th to weigh paying more of the freight gap on crude from the Americas, Africa and Southeast Asia. September and October cargoes are already more than 90% secured.
Reality
Dubai crude rose $14.4 in a week to $114.7 a barrel while the Korean pump average fell 1.1 won to 1,859.1 a liter. The government's ninth-round maximum for gasoline is 1,784 won, and the report does not explain the gap.
Reality