Domestic Diesel Prices Reach All-Time High... Surpass Gasoline for the First Time in 14 Years

[Image source=Yonhap News]

[Asia Economy Reporter Lim Chun-han] The nationwide average price of diesel has surpassed that of gasoline for the first time in 14 years.

According to the Korea National Oil Corporation's oil price information service OPINET, as of 4 p.m. on the 11th, the average retail price of diesel at gas stations nationwide was 1,947.6 won per liter (L), which is 1.5 won higher than the average gasoline price of 1,946.1 won. While gasoline prices rose by 2.3 won compared to the previous day, diesel prices increased by 6.1 won in just one day, causing the price reversal. This is the first time since June 2008, about 14 years ago, that domestic diesel prices have exceeded gasoline prices.

Recently, diesel prices have surged due to a global shortage of diesel inventories centered in Europe and supply difficulties triggered by the Ukraine-Russia conflict. In particular, Europe depends heavily on Russia for about 60% of its total diesel imports, and following the Ukraine crisis, sanctions on Russian petroleum products have continued, causing disruptions in diesel supply.

In the international oil market this year, diesel prices have risen more sharply than gasoline prices. As of the first week of this month, international gasoline prices increased by 50.1% compared to the beginning of the year (from $91.5 to $137.4 per barrel), while international diesel prices rose by 75.6% (from $92.4 to $162.3 per barrel). Domestic diesel prices are also analyzed to have surged in line with the rise in international prices. The government's expansion of the fuel tax reduction rate (from 20% to 30%), implemented from the 1st, did not stop the upward trend in domestic diesel prices. After a slight decline for three days following the expansion of the fuel tax cut, domestic diesel prices resumed their upward trend from the 4th.

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