Gas Prices Drop to 1,900 Won Range for First Time in Two Months

Gasoline prices at domestic gas stations have fallen to an average of the low 1,900 won range for the first time in two months. This decline is attributed to falling international oil prices, as well as the stabilization of factors such as the time lag for international prices to be reflected domestically and maritime shipping costs (tolling fees). Since the beginning of this month, international oil prices have shown stability, and their impact has gradually begun to be reflected in domestic retail prices. According to the Korea National Oil Corporation, the average price of regular gasoline sold at gas stations nationwide in the fourth week of June decreased compared to the previous week, recording prices in the low 1,900 won range. A representative from the Korea National Oil Corporation indicated that if the downward trend in international oil prices continues, further price drops can be expected next week.

Analyses suggest that the recent weakening of the yen and the prevailing strong-dollar trend are influencing the decline in international oil prices. While the won-dollar exchange rate surpassing the 1,300 won mark places a burden on the prices of imported raw materials, the significant drop in international oil prices is contributing to the overall stabilization of import prices. This trend appears to have a positive impact on consumer price stability.

However, industry insiders remain vigilant about the possibility of international oil price hikes. Previously, when international oil prices surged past $100 per barrel, it impacted upstream industries such as aviation, petrochemicals, refining, and shipping. The aviation sector, in particular, with its high proportion of fuel costs, was directly affected, and the petrochemical industry faced increased production costs due to rising raw material prices. A representative from the Korea Petroleum Association stated that increased volatility in international oil prices heightens management uncertainty for related industries.

Currently, expectations for domestic gas price reductions due to stabilizing international oil prices are dominant. However, various variables such as geopolitical risks and oil-producing nations' policies can influence international oil prices, necessitating close monitoring of future price trends.