Prices of gasoline in South Korea have reportedly risen to their highest levels in over eight years this week as the conflict between Russia and Ukraine continues to worsen and push global oil prices higher amidst ongoing supply disruptions.
The average retail price of gas reached ₩1,904.35 ($1.55) per liter on Thursday morning, up by ₩11.95 ($0.01) from the previous day, as per Opinet, a provider of crude oil price run by the state-owned oil and gas firm, Korea National Oil Corp.
Previously, the countrywide average gasoline prices reached the ₩1,900-mark in October 2013, whereas the highest-ever figure recorded was over ₩2,000 ($1.63) per liter, between August and October 2012.
The surge in prices follows the Ukraine conflict as many fear disruptions in the global oil supply, given that Russia is one of the major global exporters of natural gas and oil.
While Russian oil makes up less than 5% of the total oil imported in South Korea, the deepening tensions over the Ukraine crisis have caused concerns to grow over global oil supply disruptions.
Seoul had decided last week to prolong the 20% fuel tax cuts for three more months, until July end, in an attempt to ease consumer burdens and escalation of inflationary pressure.
A 20% fuel tax cut signifies a ₩164 ($0.13) reduction in the prices of gasoline per liter and a ₩116 ($0.1) reduction in the prices of diesel per liter at local fuel stations, with the South Korean government saying that a further cut may be possible as per the trend in oil price.
The upper limit for a fuel tax cut is set at 30%.
The global crude market had fallen sharply after the UAE signaled that it was willing to call the members of the Organization of the Petroleum Exporting Countries for boosting oil output.
While the West Texas Intermediate crude fell 12.1%, hitting $108.70 per barrel, South Korea’s benchmark, the Dubai crude, continued the volatile trading, surging by 4% to $127.86 a barrel.