Even with Increased Fuel Tax Cuts, Gas Prices Remain High... Rising for 2 Consecutive Weeks

Gasoline Up 21.0 Won · Diesel Up 36.7 Won
"Gasoline Prices Expected to Surpass Diesel Again Next Week"

An announcement regarding the increase in the fuel tax reduction rate from the current 20% to 30% was posted on the 1st at a directly operated gas station in Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Moon Chaeseok] Although the government expanded the fuel tax reduction starting this month, gasoline and diesel prices showed an upward trend for two consecutive weeks due to rising international oil prices.

According to Opinet, the oil price information service of the Korea National Oil Corporation, the average retail price of gasoline at gas stations nationwide in the third week of May (May 15-19) rose by 21.0 KRW per liter from the previous week to 1,963.6 KRW per liter. Since the fuel tax reduction rate was expanded from 20% to 30% starting May 1, gasoline prices in the first week dropped by 44.2 KRW compared to the previous week, but have shown an upward trend for two consecutive weeks thereafter.

The average gasoline price this week in Seoul, the region with the highest prices, was 2,023.4 KRW per liter, up 25.8 KRW from the previous week, while Daegu, the region with the lowest prices, recorded 1,937.0 KRW per liter, up 20.3 KRW from the previous week. By brand, GS Caltex gas stations had the highest average price at 1,971.4 KRW per liter, and discount gas stations were the cheapest at 1,941.3 KRW per liter.

The nationwide average diesel price in the second week rose by 36.7 KRW to 1,976.4 KRW per liter compared to the previous week. On a daily average basis, the nationwide average diesel price surpassed gasoline prices starting May 11. This is the first time in 14 years since 2008 that diesel prices have been higher than gasoline prices.

However, the upward trend in diesel prices is expected to slow down next week. The Korea Petroleum Association stated, "Diesel prices dropped significantly from the first to the second week, and considering that international oil prices are usually reflected in domestic prices after 2 to 3 weeks, the upward trend is likely to ease."

Gasoline prices are expected to continue rising next week. An association official explained, "In the U.S., gasoline demand is increasing while gasoline inventories remain low. Global production facilities are also operating at full capacity, so gasoline prices are heading toward record highs." He added, "If this continues, gasoline prices will surpass diesel prices again."

Meanwhile, international oil prices have been rising this week due to the ongoing Russia-Ukraine conflict and expectations of easing lockdown measures in Shanghai, China. Dubai crude, the benchmark for imported crude oil in Korea, rose by 4.0 dollars from the previous week to 108.7 dollars per barrel, and the international average gasoline price increased by 10.2 dollars to 145.6 dollars per barrel.

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