Exchange Rate and International Oil Prices Rise, Pushing Up Gas Station Prices
Upward Trend Likely to Continue Amid Potential U.S.-Iran Clash
Reflected at Domestic Gas Stations with a 2?3 Week Time Lag
Domestic gas station fuel prices have turned upward for the first time in 11 weeks.
According to Opinet, the oil price information system of the Korea National Oil Corporation, the average retail price of gasoline at gas stations nationwide during the third week of February (15-19) is 1,688.3 won per liter (ℓ). This is an increase of 2.0 won from the previous week. With international gasoline and diesel prices on the rise, domestic prices are also expected to continue their upward trend next week.
Seoul, which has the highest gasoline prices in the country, recorded 1,750.2 won, up 2.3 won during this period. Daegu, which has the lowest prices, stood at 1,549.1 won, an increase of 3.0 won. By brand, SK Energy gas stations were the most expensive at 1,696.5 won, while thrift (Altteul) gas stations were the cheapest at 1,662.1 won.
Diesel prices are also rising. The average retail price of diesel was 1,587.6 won, up 4.6 won from the previous week.
This week, international oil prices were interpreted as having risen due to geopolitical instability stemming from Iran’s partial closure of the Strait of Hormuz and the United States setting a deadline for negotiations with Iran. At the same time, the continuation of nuclear talks between the United States and Iran is assessed to have limited the scale of the increase. Dubai crude, which serves as the benchmark for imported crude oil prices, rose 0.8 dollars from last week to 68.6 dollars (about 99,400 won).
The international gasoline price came to 73.9 dollars (about 107,000 won), down 0.8 dollars, while the international price of automotive diesel was tallied at 89.4 dollars (about 129,500 won), up 0.7 dollars.
Industry insiders expect domestic gas station fuel prices to continue rising for the time being, affected by factors such as the exchange rate and higher international oil prices. An official at the Korea Petroleum Association said, “Recently, the exchange rate and international gasoline and diesel product prices have all gone up,” adding, “Domestic gas station fuel prices are expected to continue their upward trend next week as well.” Changes in international oil prices are typically reflected in domestic gas station prices with a time lag of about two to three weeks.
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