Slight Rise in Overseas Gasoline Prices... Fuel Tax Reduction Expected to Lower Prices Next Week

Up 0.4 Won from Last Week
National Average 1968 Won, Rising for the First Time in 5 Weeks

Fuel Tax Cut Rate from 20% to 30% Starting Tomorrow
Gasoline Down 83 Won/L, Diesel Down 58 Won/L

On the 17th, fuel price information is displayed at a gas station in downtown Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Moon Chaeseok] This week, domestic gasoline prices at gas stations in South Korea rose slightly for the first time in five weeks. With the government's expanded fuel tax reduction measures set to take effect next week, gasoline prices are expected to decrease by 83 KRW per liter, and diesel by 58 KRW per liter.

According to the Korea National Oil Corporation's oil price information service OPINET on the 30th, the average gasoline price at gas stations nationwide during the fourth week of April (April 24-28) recorded 1,968.2 KRW per liter, up 0.4 KRW from the previous week. This is analyzed to be influenced by recent rises in international oil prices and exchange rates.

In Seoul, the region with the highest domestic prices, the average gasoline price this week rose by 3.9 KRW to 2,032.2 KRW per liter compared to the previous week, while Daegu, the region with the lowest prices, saw a slight decrease of 0.2 KRW to 1,940.7 KRW per liter. By brand, GS Caltex gas stations had the highest average price at 1,977.0 KRW per liter, while budget gas stations were the cheapest at 1,942.1 KRW per liter.

The nationwide average diesel price this week also rose by 8.1 KRW to 1,907.7 KRW per liter compared to the previous week.

Domestic gasoline and diesel prices are expected to decline again starting from the 1st of next month due to the expanded fuel tax reduction measures. The fuel tax reduction rate applied to petroleum products will increase from the existing 20% to 30%. Accordingly, gasoline will see an additional reduction of 83 KRW per liter, and diesel 58 KRW per liter. There is typically about a two-week lag before the fuel tax reduction is fully reflected in gas station prices, but refiners have agreed to immediately apply the tax cut at approximately 760 company-operated gas stations nationwide in cooperation with government policy.

However, most independently owned gas stations, which make up the majority, are expected to lower prices only after exhausting their inventory purchased before the additional fuel tax reduction, so it may take some time before the full effect of the tax cut is seen.

To stabilize oil prices, the government reduced the fuel tax by 20% starting November 12 last year. Before the tax cut, the nationwide average gasoline price was around 1,810 KRW per liter. On the first day of the tax cut, prices dropped by 42 KRW, and a week later, the decline widened to 111 KRW. It took nearly a month for the full effect of the 20% fuel tax reduction (a 164 KRW decrease in gasoline prices) to be realized. Subsequently, as international oil prices stabilized somewhat, gasoline prices fell to 1,621 KRW on January 7 earlier this year.

This week, international oil prices slightly declined. Dubai crude oil, the benchmark for domestic imported crude, fell by 5.4 dollars to 101.3 dollars per barrel compared to the previous week, and the international average gasoline price dropped by 3.1 dollars to 124.8 dollars per barrel. The Korea National Oil Corporation stated, "The international oil price decline this week was due to factors such as the strong US dollar and strengthened lockdowns in Chinese cities amid the spread of COVID-19."

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