Gasoline Prices Near 1,600 Won Just One Week After Fuel Tax Cut

Fuel Tax Cut Lowers Price by 108.6 Won in 6 Days
International Gasoline Prices Fall for 2 Consecutive Weeks... Stabilizing Prices
International Oil Prices Also Decline Amid US-China Strategic Reserves Release Talks

[Asia Economy Reporter Hwang Yoon-joo] One week after the fuel tax was reduced, domestic gasoline prices are approaching the 1,600 KRW range. The international gasoline prices, which serve as the benchmark for domestic gas station selling prices, have stabilized quickly due to a two-week consecutive decline. In particular, the government's unconventional method of supplying petroleum products to budget gas stations equivalent to the tax reduction amount starting the day before the fuel tax implementation played a significant role in stabilizing domestic oil prices.

According to the Korea National Oil Corporation's oil price information service Opinet, as of 10 a.m. on the 18th, the nationwide average gasoline price was recorded at 1,701.5 KRW. One week after the fuel tax reduction took effect (on the 12th), gasoline prices sold at gas stations nationwide dropped by 108.6 KRW.

The nationwide average gasoline price, which was 1,810.1 KRW the day before the fuel tax implementation, fell by 42.4 KRW on the first day alone to 1,767.7 KRW. Subsequently, the daily decline amounts were 16.6 KRW → 8.6 KRW → 17.7 KRW → 12.9 KRW → 7.3 KRW → 3.1 KRW. Based on this trend, it is expected that gasoline prices will fall into the 1,600 KRW range starting from the 19th, one week after the fuel tax reduction.

There were concerns that the decline in gasoline prices might not be strongly felt by the general public due to stable international oil prices before the fuel tax reduction took effect, but the two-week consecutive drop in international gasoline prices greatly helped. Domestic refiners set gas station gasoline prices weekly by reflecting international gasoline prices. According to the Korea National Oil Corporation, international gasoline prices peaked at $101.3 per barrel in the fourth week of October and have gradually fallen to $98.4 in the first week of November and $96.4 in the second week.

In particular, the United States' active efforts to stabilize international oil prices are also driving prices down. It was revealed that U.S. President Joe Biden proposed to Chinese President Xi Jinping, as well as allies including South Korea, Japan, and India, to jointly release strategic petroleum reserves. As a result, West Texas Intermediate (WTI) and Brent crude oil prices recorded $78.3 and $80.2 respectively on the previous day, marking the lowest prices since October 7.

A representative from the Korea Petroleum Association said, "Refiners are lowering selling prices by reflecting the decreased international gasoline prices, and if independent gas stations receive supplies corresponding to the fuel tax reduction volume, gasoline prices will further decline next week," adding, "From tomorrow, the average gasoline price is expected to drop into the 1,600 KRW range."

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