Domestic Gasoline Hits Lowest Price, Enters 1100-Won Range... Refiners Forecast 'Earnings Shock'

On the 20th, as gasoline prices at gas stations nationwide decline due to the spread of COVID-19 and the drop in international oil prices, a citizen is refueling at a gas station in Goyang-si, Gyeonggi Province. Photo by Moon Honam munonam@

[Asia Economy Reporter Park So-yeon] The nationwide lowest diesel price has dropped to the 960 KRW per liter range. The lowest gasoline price also fell to 1,125 KRW per liter, entering the 1,100 KRW range. The plunge in international oil prices has been reflected in domestic gas station fuel prices. Due to the production increase war among oil-producing countries and the shockwave from the novel coronavirus disease (COVID-19), which led to the first-ever negative oil prices, domestic fuel prices are expected to continue declining.

According to the Korea National Oil Corporation’s oil price information service Opinet as of 9 a.m. on the 21st, the average diesel price at gas stations nationwide fell by 3.62% from the previous day to 1,113.71 KRW per liter. This is about a 20% decrease from the 1,400 KRW range at the beginning of this year. By region, many areas have already entered the 1,000 KRW range.

Daegu recorded the lowest average price nationwide at 1,066 KRW per liter, followed by Busan at 1,079 KRW, Daejeon at 1,083 KRW, Gyeongnam at 1,092 KRW, Ulsan at 1,093 KRW, and Gyeongbuk at 1,095 KRW. The average diesel price has never fallen below 1,000 KRW since it first exceeded 1,000 KRW in March 2005 at 995.67 KRW and April 2005 at 1,035.5 KRW. However, the lowest price has already dropped to the 900 KRW range.

The lowest diesel price nationwide is currently 966 KRW per liter at a directly operated gas station in Changwon, Gyeongnam. Gas stations with diesel prices in the 900 KRW range are also emerging in Daegu and Gyeongnam. In Seoul, the lowest diesel price as of this day is 1,018 KRW, approaching the 900 KRW range.

Gasoline prices are also on the verge of breaking below 1,300 KRW, with a nationwide average of 1,304.27 KRW per liter. In local areas, Daegu is at 1,258 KRW, Gyeongbuk at 1,290 KRW, Gyeongnam at 1,283 KRW, Busan at 1,269 KRW, Daejeon at 1,266 KRW, and Sejong at 1,291 KRW, all below the 1,300 KRW mark. The nationwide lowest gasoline price is 1,125 KRW per liter. The nationwide average gasoline price has never fallen below 1,300 KRW since January 6, 2009, when it recorded 1,300.7 KRW.

The refining industry expects further declines in domestic oil prices, considering that international oil prices are typically reflected in domestic gas station prices after about 2 to 3 weeks. International oil prices, which fluctuated around 60 USD per barrel at the beginning of this year, have recorded negative prices for the first time in history.

In addition to the oil price plunge, the refining industry is forecasting 'earnings shock' level results due to decreased oil demand caused by the spread of COVID-19. The industry expects SK Innovation, the top domestic refiner, to report a shocking operating loss of about 1.7 trillion KRW, which is approximately 30% less than the securities firms’ forecast of a 1.3 trillion KRW operating loss.

Accordingly, the combined operating losses of the four refiners?SK Innovation, GS Caltex, S-Oil, and Hyundai Oilbank?are expected to exceed 3 trillion KRW in the first quarter. A refining industry official said, "The oil price plunge in the first quarter has caused enormous losses in the refining industry," adding, "Given the current situation, quarterly deficits are expected to continue into the second quarter."

This content was produced with the assistance of AI translation services.