[why&next] Gasoline and Kerosene from the Same Source... The Economics of Refining

[Oil Price Betrayal]③ Differentiating Crude Oil Boiling Points to Classify Fuel Types
'Yamchejok' Flourish by Producing and Selling Fake Diesel Amid Price Surge

Editor's NoteIt has been a year since the government introduced the fuel tax reduction measure as a countermeasure against high oil prices. Although the once sharply rising fuel prices have recently stabilized, the sighs of ordinary people have deepened. This is because the abnormal phenomenon of diesel and kerosene prices, considered representative 'fuel for the common people,' being sold at higher prices than gasoline, continues. People chose diesel cars to reduce the burden of fuel costs, but instead, their losses have increased, and ordinary people using kerosene boilers for heating are only worried about heating expenses. There are calls for tailored measures to reduce the burden on ordinary people, such as temporarily suspending the individual consumption tax on kerosene. Asia Economy will examine the causes of the abnormal fuel price phenomenon, its economic ripple effects, and what measures are needed in households and industries.

[Asia Economy Reporter Choi Seoyoon] Diesel is known as 'fuel for the common people,' and gasoline as 'premium fuel,' but in fact, they are like half-siblings born from the same root. The key point is that fuel types are distinguished by different boiling points during the crude oil extraction process. Prices also vary by fuel type. This characteristic is cleverly exploited by 'cheaters' who produce and sell fake diesel, causing serious concerns for authorities.

According to the refining industry on the 23rd, petroleum products are made by heating crude oil to 340~360℃ in a furnace and then pouring it into an atmospheric distillation unit. The atmospheric distillation unit, where crude oil is first introduced, separates liquefied petroleum gas (LPG), gasoline, naphtha, kerosene, diesel, heavy oil, and residue based on boiling point differences by heating the crude oil. Components with lower boiling points evaporate first, vaporize, and are then liquefied and collected in separate containers.

The fuel type is determined by the boiling point during the heating process. Gasoline is produced at 30~180℃, naphtha at 100~180℃, kerosene at 170~250℃, diesel at 240~350℃, and heavy oil at above 350℃. The daily refining volume reaches hundreds of thousands of barrels. Gasoline is classified into automotive, aviation, and industrial gasoline.

Naphtha, the raw material for petrochemical basic materials, is divided into fuel and raw material types. The fuel type is used as a manufacturing raw material for gasoline and others, while the raw material type is mainly used for petrochemical industries such as synthetic resins. Kerosene, once commonly referred to as 'oil,' is used as household heating fuel and boiler fuel.

Viscous diesel has better fuel efficiency and is generally cheaper than gasoline. It is widely used as fuel for vehicles equipped with diesel engines such as buses and trucks, as well as industrial fuel for construction site forklifts and excavators. Heavy oil, also called bunker C oil, is cheaper than diesel. It is heavy and sticky and mainly used for large ships. Refineries have advanced facilities to produce high value-added petroleum products like diesel to increase profitability.

Recently, as diesel prices surged, cases of producing and selling 'fake diesel' mixed with kerosene have been frequently detected. According to the Korea Petroleum Quality and Distribution Authority, which cracks down on fake petroleum distribution, consumer damage reports related to this increased by 71%, from 272 cases in the first quarter to 465 cases in the second quarter of this year.

This month, 20 people were booked without detention by the Coast Guard on charges of illegally distributing 750,000 liters of marine diesel, which cannot be used for vehicles, at gas stations nationwide. It is reported that they purchased marine diesel at 700 won per liter and sold it at 800 won, making unfair profits. In September, a petroleum seller who mixed kerosene and diesel at an 8:2 ratio and sold fake diesel to construction sites for over five years, earning about 9.3 billion won, was also arrested.

On the 20th, at a gas station in Seoul where prices for kerosene, known as a "common people's fuel," continue to rise, kerosene is being sold at a higher price than gasoline in some areas. Gasoline is priced at 1,609 KRW per liter, kerosene at 1,650 KRW, and diesel at 1,835 KRW. Photo by Kang Jin-hyung aymsdream@