The government plans to take steps to implement a capping system on local fuel prices this week, a senior presidential adviser said Monday, shortly after President Lee Jae Myung called for a swift launch of the system to contain a jump in gas prices as the U.S.-led war with Iran has intensified in the Middle East.
2. How is this related to the sub
(1) Oil Shock: Trump’s reckless war is causing an energy crisis in Korean economy.
3. My opinion
Korea has 200 day worth of strategic oil reserve left at the moment and 70% of its oil import from the Middle East. This led to panic on oil supply and the government implemented the article of 1975 Price Stabilization Act.
What is Article 2 of the Price Stabilization Act?
Article 2 (Designation of Maximum Prices)
1. When circumstances prescribed by Presidential Decree exist—such as internal or external crises, natural disasters, or urgent financial or economic emergencies—and when it is deemed necessary to stabilize the livelihood of citizens and the national economy, the Government may designate maximum prices (hereinafter “price ceilings”) for particularly important goods, rents for real estate, or charges for services.
2. Price ceilings may be designated by stage of transaction, such as:
• production stage
• wholesale stage
• retail stage
3. If the Government determines that the reasons for maintaining a price ceiling no longer exist, it must abolish the price ceiling without delay.
4. When the Government designates or abolishes a price ceiling under paragraph (1) or (3), it must promptly publicly announce the fact.
szopatoszamuraj on
I wonder if they will start asking russia for supplies
4 Comments
1. Summary
The government plans to take steps to implement a capping system on local fuel prices this week, a senior presidential adviser said Monday, shortly after President Lee Jae Myung called for a swift launch of the system to contain a jump in gas prices as the U.S.-led war with Iran has intensified in the Middle East.
2. How is this related to the sub
(1) Oil Shock: Trump’s reckless war is causing an energy crisis in Korean economy.
3. My opinion
Korea has 200 day worth of strategic oil reserve left at the moment and 70% of its oil import from the Middle East. This led to panic on oil supply and the government implemented the article of 1975 Price Stabilization Act.
What is Article 2 of the Price Stabilization Act?
Article 2 (Designation of Maximum Prices)
1. When circumstances prescribed by Presidential Decree exist—such as internal or external crises, natural disasters, or urgent financial or economic emergencies—and when it is deemed necessary to stabilize the livelihood of citizens and the national economy, the Government may designate maximum prices (hereinafter “price ceilings”) for particularly important goods, rents for real estate, or charges for services.
2. Price ceilings may be designated by stage of transaction, such as:
• production stage
• wholesale stage
• retail stage
3. If the Government determines that the reasons for maintaining a price ceiling no longer exist, it must abolish the price ceiling without delay.
4. When the Government designates or abolishes a price ceiling under paragraph (1) or (3), it must promptly publicly announce the fact.
I wonder if they will start asking russia for supplies
In terms of oil intensity—the relation between oil consumption and GDP—[Korea is quite poorly positioned](https://www.atlanticcouncil.org/dispatches/what-a-middle-east-oil-and-lng-crisis-means-for-china-and-east-asia/) even by East Asian standards.
https://preview.redd.it/rvj61xaodzng1.jpeg?width=620&format=pjpg&auto=webp&s=6d75bddfc482d7d62f579d8e6952c8bd8dbf499a
Milton Friedman once said price caps (price controls) are always bad and were detrimental in virtually all economic situations.