Gasoline Prices Hit Record High, Creating Heavy Economic Burden
Seoul May 2, 2004; Kim Jae-kyoung writing for the Kprea Times reported that gasoline prices nationwide are hitting record highs, driven by soaring oil prices caused by a fall in international oil production.
In its survey of 556 gas stations nationwide, the Korea National Oil Corp. (KNOC) found that gasoline prices averaged 1,357.99 won per liter last week, up 5.49 won from a week ago.
The figure is the highest since the second week of March in 2003, right before the United States launched the military campaign against Iraq, at 1,353.4 won.
Diesel oil prices also hit a record high of 858.83 won last week, up 8.26 won from a week before, breaking the previous record of 850.57 won registered during the third week of April.
By region, prices at Seoul gas stations rose increased 4.12 won to 1,409.25 won per liter last week from the prior week, while diesel prices at the region jumped by 8.76 won to 912.21 won.
Kwangju in South Cholla Province showed the largest weekly gains both in gasoline and diesel prices last week, marking increases of 19.17 won and 18.41 won, respectively.
In Cheju Island where oil prices are the highest, gasoline and diesel oil prices came to 1,425.25 won and 946.63 won. North Cholla Province posted the lowest, with gasoline and diesel oil prices standing at 1,328 won and 825.33 won.
``Price hikes at gas stations were due to a rise in Dubai oil prices triggered by growing unrest in the Middle East region,ĄŻĄŻ a KNOC official said.
``Given the continuing unstable supply and demand situation in international markets, oil price hikes are expected to continue for the time being,ĄŻĄŻ he added.
The price of Dubai crude oil hit a 14-year high of $33.53 per barrel on Saturday, the highest since it recorded $34.13 on Oct. 16 1990 right before the Gulf War took place.
Policymakers and economists expressed concern that increases in raw materials prices will build up inflationary pressure and dampen private spending, thus delaying economic recovery.
According to the Bank of Korea, a $5 rise in international oil prices per annum will result in a 0.3 percentage point reduction in economic growth and $4 billion in the current account, while raising consumer prices by around 0.5 percentage point.
