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Lee Orders Second Oil Price Cap and Deeper Fuel Tax Cuts in Energy Crunch

The steps aim to steady fuel costs during the Hormuz disruption.

President Lee Jae Myung (C, front row) inspects facilities at a strategic oil reserve operated by the state-run Korea National Oil Corp. in Seosan, about 280 kilometers southwest of Seoul, on March 26, 2026. (Yonhap)
President Lee Jae Myung speaks during a meeting with representatives of local petrochemical firms at a strategic oil reserve operated by the state-run Korea National Oil Corp. in Seosan, about 280 kilometers southwest of Seoul, on March 26, 2026. (Yonhap)
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Overview

  • Lee, who visited the KNOC oil reserve in Seosan on Thursday, urged a joint push with industry to secure crude and cut use.
  • The government begins a second, two-week oil price cap on Friday, with Lee telling gas stations to follow the ceiling and warning against hoarding or collusion.
  • Officials will widen temporary fuel tax cuts, raising discounts to about 15% for gasoline and 25% for diesel to ease pump prices.
  • Lee asked households and businesses to save power, noting KEPCO carries about 200 trillion won in debt and that a rate freeze could swell losses.
  • Seoul says the UAE will prioritize South Korean crude needs, including roughly 24 million barrels, as the Strait of Hormuz remains largely closed and shipping routes face strain.