Diesel Prices Fall Below 2000 Won... Will Fuel Prices Remain Stable During Vacation Season?

On the 24th, as domestic gasoline and diesel prices continue to decline for the third consecutive week due to the drop in international oil prices and the expanded effect of fuel tax reduction, a major gas station in Seoul is selling gasoline at 1,939 won per liter and diesel at 1,969 won per liter. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Oh Hyung-gil] Diesel prices have finally dropped below 2,000 won.

While international oil prices have shown mixed trends, the effect of the government's additional fuel tax reduction has caused the prices of petroleum products such as gasoline and diesel nationwide to follow a downward curve throughout July.

According to oil price information service Opinet on the 30th, the average price of gasoline at gas stations nationwide fell from 2,128.8 won per liter on the 1st of this month to 1,908.9 won as of the 29th, a decrease of about 219.9 won in one month. This is a drop of over 10%.

The average price of diesel also decreased by 165.5 won during the same period, from 2,157.7 won to 1,992.2 won.

With the average selling price of gasoline falling below 2,000 won for the first time in about 50 days this month, the average selling price of diesel also dropped below the 2,000 won mark for the first time in over two months since May 24, reaching 1,998.4 won on the 28th.

At some gas stations, gasoline prices have fallen to the 1,750 won range, and diesel prices have dropped to the 1,870 won range.

Although the Russia-Ukraine war, which caused fuel prices to skyrocket, is prolonged, fuel prices appear to be gradually stabilizing.

Concerns over a global economic recession have led to a downward trend in international oil prices, driving the decline in fuel prices.

International oil prices, based on West Texas Intermediate (WTI), fell 11.0% from $108.4 per barrel on the 1st of this month to $96.4 per barrel on the 28th.

Considering that international petroleum product prices are usually reflected in domestic product prices with a 2 to 3 week lag, domestic gasoline and diesel selling prices are expected to continue falling until early next month during the holiday period.

Additionally, the government's expansion of the fuel tax reduction rate from 30% to 37% as of the 1st of this month is also interpreted as having an effect.

The total tax reduction per liter from the three rounds of fuel tax cuts in November last year, May this year, and this month amounts to 305.2 won for gasoline and 212.8 won for diesel.

However, recent rises in international oil prices due to uncertainties over additional production increases from Saudi Arabia and decreases in U.S. commercial crude oil inventories are considered risk factors.

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