Fuel prices fall back into the 1,900-won range after two months... likely to keep declining

[Financial News] Gasoline and diesel prices at domestic gas stations have fallen below 2,000 won per liter for the first time in about two months. The decline appears to reflect falling global oil prices, along with the government’s lower cap on petroleum product prices. However, consumers are expected to feel the full effect of the drop with a delay of about two to three weeks, given station inventory conditions.
According to Opinet, KNOC’s oil price information service, the nationwide average gasoline price at gas stations stood at 1,991.1 won per liter as of 9 a.m. on the 28th. That was down further from 1,996.1 won the previous day, keeping the national average below the 2,000-won mark for a second straight day. The nationwide average diesel price also came in at 1,982.3 won per liter.
The nationwide average gasoline price has returned to the 1,900-won range for the first time in about two months. It had previously risen into the 2,000-won range on April 18, when it reached 2,001.5 won per liter.
The recent decline in fuel prices is seen as the result of falling international oil prices, combined with the government’s lower cap on petroleum product prices. Starting at midnight on the 27th, the government applied the seventh cap on petroleum prices, cutting gasoline by 150 won to 1,784 won per liter, diesel to 1,773 won, and kerosene to 1,380 won. It was the first downward adjustment in 106 days since the cap system was introduced.
Still, it will likely take time before the lower prices are fully reflected at the pump. Considering gasoline inventories purchased earlier at higher prices, it may take about two to three weeks for consumers to feel the impact of the recent decline in global oil prices. The timing and scale of price cuts are also expected to vary depending on each gas station’s inventory levels.
If international oil prices remain stable as they have recently, domestic fuel prices could gradually settle at lower levels. Even so, it will take more time for prices to return to prewar levels.
According to Opinet, the nationwide average gasoline price at gas stations in the fourth week of February, just before the outbreak of the war between the United States, Israel and Iran, was 1,691.3 won per liter. In the fourth week of June, the international gasoline price stood at $100.6 per barrel, about 27.7% higher than the $78.8 recorded in the fourth week of February, before the war.


junjun@fnnews.com Choi Yong-jun Reporter