Gasoline Prices Drop to 1,300 Won Range After One Year... Price Decline Expected to Continue

Due to the plunge in international oil prices caused by the spread of COVID-19, gasoline prices at gas stations nationwide have fallen for nine consecutive weeks. On the 29th, at a gas station in Seoul, gasoline was sold at 1,398 won per liter and diesel at 1,198 won per liter. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Hwang Yoon-joo] Amid the continued sharp decline in international oil prices, the price of gasoline at domestic gas stations has dropped to the 1,300 won per liter range.

According to the Korea National Oil Corporation's oil price information service Opinet, as of 5 p.m. on the 30th, the average gasoline selling price at gas stations nationwide was recorded at 1,398 won per liter. This is the first time in about a year since early April last year, the fifth month of the fuel tax reduction policy implementation, that the nationwide average gasoline price has fallen below 1,400 won.

The price of diesel at gas stations also recorded 1,204 won, the lowest level since October 2016.

International oil prices collapsed below $30 per barrel around mid-March due to the 'oil price war' among oil-producing countries earlier this month. As the oil price plunge continued, yesterday the West Texas Intermediate (WTI) May contract price traded at $19.92 per barrel, down 7.4% intraday. The Brent crude May contract price also hit its lowest level in 17 years on the 30th.

In a report, KB Securities forecasted, "With Saudi Arabia announcing an increase in crude oil supply to 12.3 million barrels per day in April and production ramp-up becoming a reality, international oil prices are expected to weaken further in April and May."

An official from the refining industry said, "The biggest problem is the decrease in petroleum product consumption due to the COVID-19 outbreak," adding, "Since domestic gas station gasoline prices reflect international oil prices with a 2 to 3 week lag, the downward trend is expected to continue."

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