As global oil prices have been continuously falling over the past few months, the average price of diesel in South Korea hit a 9-year low this week, according to the Korea National Oil Corporation on Wednesday.
The average price of diesel sold at gas stations nationwide this week stood at 1,169.93 won ($1) per liter, cheaper than the 1,162.44 won recorded during the second week of 2007, according to KNOC-operated Opinet.
Diesel, which reflects changes in global crude oil prices faster than gasoline, is slated to see more price cuts in the weeks to come, as oil prices are slated to continue dropping amid a worldwide oil glut.
The price of diesel falls to 975 won per liter at a gas station in Bucheon, Gyeonggi Province, on Tuesday. (Yonhap)
The International Energy Agency said in its January report that the global “oil market could drown in oversupply” as the market faces an “enormous strain on the ability of the oil system to absorb” new supplies from producers such as Iran.
At the same time, local diesel prices are unlikely to fall below 1,000 won, given some 670 won in taxes are levied per one liter of diesel, similar to the case of gasoline, as well as the additional costs related to refining, delivery and sales operations.
As of Wednesday, the average price of diesel in the country stood at 1147.61 won, with some gas stations selling it for less than 1,000 won.
By Sohn Ji-young (jys@heraldcorp.com)
