Oil prices to rise sharply Thursday

Prices of oil products, including gasoline, will increase sharply next year to offset losses incurred by oil refineries due to higher international oil prices and the depreciation of the Korean won.

According to the oil industry, the average import cost of crude products from Dubai, Oman and elsewhere came to $23 a barrel this month, slightly lower than $24 last December. The cost was higher, however, because the won¡¯s value against the dollar dipped 67 won from 1,217 won last year to 1,284 won this month.

Without the currency differential, domestic oil refineries would have been able to lower oil prices by 10 won per liter. With the won's slide against the dollar, however, they were pressured to raise prices by 40 to 50 won.

After agreeing to cut output by 1.5 million barrels a day on Jan. 17, the Organization of Petroleum Exporting Countries (OPEC) is moving to make another production cut. Against this backdrop, international oil prices are rapidly surging and domestic oil refineries are concerned that their crude import costs will increase even further.