Era of 2,000 Won for Gyeongyut Values (Comprehensive)

Seoul Average Price 2,002.09 Won... Surpasses 2,000 Won for the First Time in 13 Years and 8 Months
Impact of Ukraine Crisis... Increased Burden on Freight and Transportation Workers

Due to Russia's invasion of Ukraine, international oil prices have surged sharply, causing domestic fuel prices to continue soaring day after day. On the 23rd, gasoline and diesel were being sold at a Seoul gas station for well over 2,000 won per liter. Photo by Moon Honam munonam@

[Asia Economy Reporter Moon Chaeseok] Along with the soaring gasoline prices, diesel prices are also skyrocketing without end. The average price at gas stations in the Seoul area has surpassed 2,000 KRW per liter for the first time in 13 years and 8 months. Due to the aftermath of Russia's invasion of Ukraine and other factors, international diesel prices continue to soar, increasing the burden on freight and transportation workers.

According to the Korea National Oil Corporation's oil price information site Opinet as of 6:30 AM on the 23rd, the average diesel price at Seoul gas stations was recorded at 2,002.09 KRW per liter. This is an increase from 2,001.24 KRW per liter as of 3 PM the previous day, marking the first time since July 2008?13 years and 8 months ago?that the price exceeded 2,000 KRW, followed by further rises. Compared to the end of last month, the price has increased by more than 400 KRW in about three weeks. It has surged to a level comparable to the average gasoline price in Seoul at the same time (2,078.41 KRW per liter).

The diesel price surge is closely related to the Ukraine crisis. In Europe, where diesel vehicles are common, supply and demand issues have worsened since the Ukraine crisis, affecting the sharp price increase. According to major foreign media, Russia accounted for about 20% of the European Union's (EU) diesel imports as of 2019. Due to supply shortages, international diesel for automotive use closed at $144.76 per barrel on the Singapore market on the 21st. International diesel prices soared to $180.97 on the 9th. Before Russia's invasion of Ukraine, prices were in the $110 range.

There are also criticisms that the government's 20% fuel tax reduction policy, implemented since November 12 last year and focused mainly on gasoline, has relatively limited the decline in diesel prices. The gasoline tax discount is larger than that for diesel, so the price reduction effect is more pronounced for gasoline, which has weakened the effect of curbing the diesel price surge. Since the government's 20% fuel tax cut, gasoline prices have dropped by 164 KRW per liter, while diesel prices have decreased by 116 KRW per liter. The diesel price reduction is about 50 KRW less than that of gasoline.

As the situation unfolds, objections have been raised against the government's scenario of expanding the fuel tax cut to 30%. There are concerns that if diesel prices surpass gasoline prices, greater confusion could arise. A similar phenomenon occurred during the 2008 oil shock, when some drivers illegally used kerosene instead of diesel, causing controversy. Boiler kerosene prices also rose accordingly.

Diesel vehicle drivers in the transportation and freight industries, who are directly feeling the impact of the diesel price surge, have held protests urging the government to take measures. They expressed that following last year's China-origin urea solution crisis, diesel prices have skyrocketed since the beginning of the year, increasing their burden. Earlier, the Cargo Solidarity Headquarters of the Korean Public Service and Transport Workers' Union under the Korean Confederation of Trade Unions (KCTU) held a press conference in front of the Government Seoul Office on the 21st, stating, "More than 30% of transportation fees go to fuel costs, threatening the livelihoods of freight workers," and "If measures to cover losses are not implemented immediately, it is unclear where the damage will head."

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