Light Oil Prices Soar to Record High

The retail price of light oil has hit a record high. The average retail price of light oil was 1,289.32 won a liter in the first week of this month (July 3-7), up 38.34 won from the previous week, according to the report on the trend of oil prices in Korea released on July 11 by the Korea National Oil Corporation (KNOC). The report is the result of the sample survey of 980 gas stations across the country.

Seoul showed the highest price at 1,357.90 won, followed by Jeju (1,347.43 won), Incheon (1,312.50 won), Busan (1,309.20 won), and Ulsan (1,307.54).

Light oil prices rose because transportation taxes have increased this month under the government’s new energy taxation policy.

Light oil prices are expected to continue rising for a while as gas stations from July 10 began to serve oil shipped by refineries after the tax increase.

After a decrease for two straight weeks, the average price of unleaded gasoline recorded 1,539.07 won a liter, up 0.94 won from the previous week.

However, thanks to the increase in light oil price, the price ratio of gasoline to light oil surpassed 100 to 83, meeting the government’s goal for this year of 100 to 80 and even getting closer to the goal for the next year of 100 to 85.

The average national price of kerosene for indoor heating was 955.95 won a liter, up 0.23 won from the week before. However, kerosene prices for boilers dropped 0.04 won to 960.89 won a liter.

Suk-Min Hong smhong@donga.com