The gasoline price in Seoul, the region with the highest oil price in Korea, exceeded 1,800 won per liter today (18th).
Recently, as international oil prices soared to the highest level in seven years, domestic oil prices are also continuing to rise sharply.
As some of the industry and consumers fear that the domestic gasoline price may break through the 2,000 won per liter level, the need for a temporary fuel tax cut is also growing.
According to the Korea National Oil Corporation oil price information service Opinet, the average gasoline price in Seoul rose 4.4 won from 1,796.6 won yesterday to 1,801.0 won today.
In particular, gas stations that cost more than 2,500 won per liter are already appearing all over Seoul.
Jung-gu’s Seonam gas station (2,577 won) and Yongsan-gu’s Seogye gas station (2,533 won) are representative.
The national average gasoline price rose to 1,724.7 won as of today.
Last week, it closed at 1,687.2 won per liter, up 28.3 won from the previous week, but today, Monday, it has already risen by 37 won.
Previously, the national gasoline price recorded the highest price in 2012, when it exceeded 2,000 won per liter.
At that time, due to the surge in international oil prices, it exceeded 2,000 won per liter between August and October 2012.
After that, it fluctuated between 1,800 and 1,900 won per liter for about two years from November to early October 2014, and then dropped to 1,700 won in the second week of October 2014.
Most recently, domestic gasoline prices rose to 1,690.3 won in November 2018 due to an increase in international oil prices amid growing concerns about a decrease in crude oil supply due to the conflict between the US and Iran.
Accordingly, the government implemented a temporary fuel tax cut for six months from November 2018 to stabilize domestic oil prices.
The fuel tax cut ended at the end of August 2019.
Industry analysts say that the rise in oil prices is becoming more prominent due to a supply shortage caused by increased demand and a rise in the exchange rate.
The global demand for crude oil is rapidly increasing thanks to the expansion of vaccination against COVID-19, but the price of crude oil is on an upward curve as the supply of crude oil has become scarce due to the suppression of production increase in oil producing countries and the disruption of some crude oil production facilities.
In addition to this, the exchange rate is also rising, and the rate of increase in oil prices is getting bigger.
As the international oil price continues to rise and the demand for heating in winter is also increasing, there is concern that the burden on consumers will continue to increase.
The demand for fuel tax cuts is also increasing.
An industry official said, “The domestic oil price is much higher than in 2018, when the fuel tax cut was implemented.
Of course, the industry's general view is that concerns that the international oil price will break through the $100 range or that the domestic gasoline price will break through the 2,000 won range are excessive.
According to industry sources, major energy institutions such as the U.S. Energy Information Administration predicted through a recent forecast report that the market supply and demand conditions will continue to remain tight, but that the further rise in oil prices will be somewhat limited as the supply of crude oil increases in the fourth quarter.
(Photo = Yonhap News)