Gasoline prices gradually fall after surge on rumors of oil cut

Kang Mi Jin  |  2017-05-04 15:35
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Gasoline prices among private traders in some regions of North Korea are on a downward trend again, following a spike in prices after rumors spread of a possible oil embargo from China. 

"After word spread that the price of gasoline in Pyongyang had risen, gas prices in Pyongsong also increased. The price of gasoline (1kg; North Korea measures gasoline by weight) was about 8,350 KPW until April, but then rose to 17,625 KPW by April 27, and has since been gradually falling to reach the current price of approximately 14,800 KPW," a source in South Pyongan Province told Daily NK on May 2.

"There are widespread rumors that oil stores are empty due to the sudden price hikes. Private merchants have also contributed to the price rise as they have stopped sales of oil, expecting a continuous rise in price, he added.

"The merchants have reduced their use of servicha (transportation and delivery services) as their freight charge is expected to rise accordingly. In recent days, the number of customers at Pyongsong Market has notably decreased, which is making merchants jittery.

A similar trend has been observed in Ryanggang Province, where a source told Daily NK on May 1 that the price of gasoline in the region is 14,100 KPW while the price of diesel oil (1kg) has skyrocketed from 4,720 to 17,150 KPW. 

The local oil centers have stopped supplying oil due to rumors of China cutting off supplies, which has induced the sudden price hikes, she said.

"As the oil price has risen, smugglers who used to trade daily necessities and grain are trying to bring in oil first. The authorities will likely give leniency to those in the smuggling trade because a large amount of oil is needed before the planting season starts.

According to the source, the price of gasoline oil in the border areas including Ryanggang Province used to be between 8400-9600 KPW. Prices in the border regions were not originally influenced by the price hikes in Pyongyang, but they have recently joined in on the trend.

However, the rumors of Chinas potential oil suspension have not yet proven valid. The Chinese and North Korean authorities are not making public announcements on the matter, and only various rumors are said to be spreading, including theories that the North Korean authorities are attempting to divert domestic attention elsewhere.

Meanwhile, there are reportedly an increasing number of residents who are experiencing anxiety over the sudden rise in gasoline prices. As the Ryanggang-based source put it, Every year, the price of gasoline has risen by about 10,000 KPW around April, but this year, the price has leaped excessively compared to previous years. For residents, 4,000 KPW is a lot of money, so they are very sensitive toward the rise in oil prices. 

*Translated by Yejie Kim
*Edited by Lee Farrand

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