Gas prices enter 1,300 won level in Korea

Gasoline prices in Korea have dropped close to entering the 1,300 won per liter level for the first time in seven years. If global oil prices continue to fall, gasoline will get further cheaper.

According to Korea National Oil Corporation`s information service, OPNET, the average gas price sold at Korean gas stations was 1,404.84 won per liter on Monday, 1.49 down from the previous day. Some 66.1 percent of 7,859 gas stations nationwide was sold at 1,400 won per liter or lower. This means that two out of three stations are offering gas between 1,300 won and 1,400 won per liter.

The average price was less than 1,400 won in local cities of Busan, Gwangju, Daegu, Daejeon, Ulsan. A gas station in Eunseong, South Chungcheong Province offered petroleum at 1,259 won as of Monday 2 p.m., providing the lowest price. Diesel prices have already come below 1,200 won per liter. The average price on Monday was 1,185.85 won per liter, down by 1.25 won from the previous day.

Petroleum prices have fallen 83 consecutive days since they dropped to 1,501.27 won on Oct. 14 last year. If the average price enters the 1,300 won block, it will be in seven years since gasoline was sold at 1,384.36 won per liter on Jan. 22, 2009.

The oil industry projects that the downward trend will continue for a while and the prices will drop to the 1,300 won level soon. “As sanctions on Iran will be lifted soon, oil prices may go further down thanks to increased supply, and strengthened competition in the market as well as the strong dollar will also deter prices from bouncing back for a while,” said Lee Dal-seok, a senior researcher at Korea Energy Economics Institute. "The prices will start to pick up from the second half of the year due to decreased supply of shale gas by the U.S."

minki@donga.com