Diesel price is the highest in 14 years… Gasoline prices rise for 10 consecutive weeks

Gasoline and diesel price gap narrowed to 84 won
Shortage of diesel fuel in Europe, affecting Korea as well
Cargo and courier vehicles burdened by possible price reversal ↑

The price of diesel at a gas station in Seoul has exceeded that of gasoline. [연합뉴스]

As international oil prices soared in the aftermath of Russia’s invasion of Ukraine, gasoline and diesel prices are rising sharply. Diesel prices hit their highest in 14 years, and last week, gasoline prices in some areas even reversed.

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Last week, diesel prices at some gas stations surpassed gasoline prices

According to the Korea National Oil Corporation oil price information site Offinet on the 27th, the selling price of diesel at gas stations nationwide in the fourth week of March was 1918.1 won per liter, up 15.6 won from the previous week. The selling price of gasoline was 2001.9 won, up 7.5 won from the previous week.

Diesel price recorded the highest price in about 14 years since the fourth week of July 2008 (1932 won). In particular, on the 22nd, it recorded 2001 won per liter and broke the 2,000 won line, and some gas stations during the week overtook gasoline prices.

Domestic diesel prices are usually 200 won cheaper than gasoline due to the differential application of fuel tax. However, as the price of diesel has soared recently, the price gap with gasoline has narrowed to ’84 won’.

Diesel prices are displayed at a gas station in Frankfurt, Germany. [신화통신]

The sharp rise in diesel prices is attributable to the sharp rise in international automobile diesel prices. Due to Russia’s invasion of Ukraine, diesel inventory shortages in Europe are affecting Korea as well. The European Union (EU) has virtually stopped importing about 20% of its diesel imports from Russia.

According to Offinet, the international gasoline price stood at $125.98 per barrel as of the 25th. On the other hand, diesel ended at $148.81 per barrel. Even this was down $6.56 from the previous day ($153.37).

The domestic fuel tax structure is also contributing to the rise in diesel prices. Korea imposes a higher tax on gasoline than on diesel. However, as the fuel tax cut is implemented, the effect of lowering the price of gasoline, which has a larger tax discount, is becoming more pronounced. Due to the fuel tax cut, gasoline is 164 won per liter and diesel is 116 won per liter.

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Gasoline prices rise for 10 consecutive weeks… Where is the cheapest place in Seoul?

Currently, the government is considering a plan to expand the fuel tax cut from the current 20% to 30%. If this plan is realized, it is expected that diesel will overtake gasoline prices in earnest. In fact, even when the fuel tax was cut by 10% between March and December 2008, diesel prices reversed gasoline prices.

Accordingly, the burden on commercial vehicles such as freight vehicles and delivery trucks, as well as vehicles using diesel such as excavators and ready-mixed concrete is expected to increase. Recently, cargo groups, which have been burdened with a surge in diesel prices, have taken to the streets to demand support from the government.

Ukrainian Chernivs released by Maxa Technology, a US satellite information company, on the 21st (local time). Oil depots and industrial parks are on fire. [AFP=연합뉴스]

The selling price of gasoline at gas stations nationwide is 2001.9 won per liter, up 7.5 won from the previous week. Domestic gasoline prices have risen for 10 consecutive weeks, recording the highest price since the fourth week of October 2012 (2003.8 won).

As for the regional selling price, the average selling price of gasoline in Jeju, the highest-priced region, was 2108.2 won, up 9.1 won from the previous week, which was 106.3 won higher than the national average.

Seoul followed with 2079 won per liter, Incheon 2026 won, Gyeonggi 2015 won, Daejeon 2008 won, Chungbuk 2003 won, and Chungnam 2001 won. There were a total of 7 metropolitan cities where the gasoline selling price was more than 2,000 won.

As of the morning of the 27th, the cheapest gas stations in Seoul are Hwagok Station gas station and New Sinjeong gas station, which are thrifty gas stations in Gangseo-gu. The price of gasoline at the two gas stations is 1,484 won per liter and 1,868 won for diesel. Guro-gu’s S-OIL gas station followed with gasoline 1,959 won per liter and diesel 1869 won per liter.

By Heo In-hoe, reporter [email protected]