Gasoline and diesel prices are expected to rise further on the prospect of strong international oil prices. Domestic refiners are planning to increase the proportion of exports if domestic consumption decreases due to increased consumer burden.
According to the oil refining industry, the price of West Texas Intermediate (WTI) on the New York Mercantile Exchange recorded $114.09 per barrel on the 26th. It was up 3.4% from the previous day. During the same period, Dubai crude and Brent crude rose 2.67% and 2.74% to $109.78 and $114.17 per barrel, respectively.
International oil prices stagnated below the $100 range at one point in early May, but have since risen. The European Union (EU) is likely to phase out imports of Russian crude oil, and demand increases without increasing global production.
The global demand for gasoline and diesel has surged. This is because, along with the solid demand for diesel for power generation from the EU following the Russia-Ukraine war, the driving season is about to start in June. During the summer, the demand for gasoline increases significantly.
Domestic gasoline and diesel prices are more likely to rise. Petroleum product prices are reflected in international oil prices with a lag of 2-3 weeks.
“While global crude oil supply is limited, demand for petroleum products such as gasoline and diesel has increased,” said an official from an oil refining industry.
Refiners such as SK Innovation, GS Caltex, Hyundai Oilbank, and S-Oil plan to further increase the proportion of exports if domestic consumption of petroleum products declines. These refineries are running their plants at full capacity.
“Consumption is slowing as domestic gasoline and diesel prices exceed 2,000 won per liter,” said an oil company official.
By Ryu Tae-woong [email protected]