Retail prices of gasoline in Korea hit a fresh monthly record in February on the back of escalated tensions surrounding Iran and upbeat economic figures from the U.S. and China, data showed Tuesday.
According to the state-run Korean National Oil Corp., the average price of regular gasoline was 1,986.54 won ($1.77) per liter last month, up 5.52 won from the previous high logged in November. That is also 31.46 won higher than in January.
Oil prices have been skyrocketing over the last year as persisting unrest in the Middle East fans jitters over supply disruptions, and demand continues to grow from emerging markets.
Improvement in U.S. reports for jobless claims and consumer spending, as well as expanding manufacturing activities in China, furthered upward pressure, outweighing weak demand from Europe.
In Korea, pump prices have steadily risen since crossing the 1,900 won threshold in March, weighing strongly on low-income earners, exporters and energy-intensive industries such as airline and logistics.
The nationwide average climbed about 50 won per liter since a Jan. 6 turnaround, following a 40-day streak of increases. On Sunday, it hit a daily high of 2,014.21 won.
“The main factor behind the current volatility in oil prices is anxiety over supply interruptions. But supply conditions in the international oil market are quite okay,” said Lee Kwang-woo, a researcher at LG Economic Research Institute, citing Libya’s rising oil production and higher U.S. crude inventories.
“Though Korea is more susceptible to potential risks, the current geopolitical instability in crude producing nations is expected to have a limited impact on oil prices in the long run.”
Korea is the world’s fifth-biggest crude buyer, and imports almost all of its oil needs. An array of national and local taxes takes up about 57.3 percent of pump prices, according to the Ministry of Strategy and Finance.
Korea’s benchmark Dubai crudes edged down $1.16 to $121.09 a barrel on Singapore’s spot market Monday. The average pump price in Seoul was 2,091.32 won per liter on Tuesday.
By Shin Hyon-hee (firstname.lastname@example.org