The sharp rise in international oil prices touches the skin. There is no fuel that has not risen, such as gasoline, diesel, and LPG. According to Korea National Oil Corporation’s Office, the average selling price of gasoline at gas stations nationwide as of the weekend was 2001.81 won per liter and 1918.92 won for diesel. The average gasoline price in Chungcheong Province is also fluctuating around 2,000 won per liter. Above all, diesel prices are rising sharply. Compared to the beginning of last year, when it was 1,200 won per liter, it has risen too much. Diesel prices are closely chasing gasoline prices. In some regions, a reversal is also taking place, where the price of diesel exceeds that of gasoline.
I wonder if oil prices have soared so rapidly in such a short period of time. There is talk among drivers that they are afraid to go to the gas station. As oil prices are rising rapidly, the policy effect of the 20% fuel tax cut seems to be halved. The sharp rise in diesel prices is a direct blow to the self-employed and those in the transportation industry. This is because most of the trucks are powered by diesel fuel. Of the 26 million vehicles in operation in Korea, 10 million, or 38%, are diesel vehicles. The subsistence-type self-employed mainly use 1 ton trucks.
For a truck that uses 4000 liters of diesel per month, it is said that the fuel cost burden is 2.5 million won more than at the beginning of last year. Fuel costs account for 42.7% of the average cost of cargo drivers. This means that the truck owners are facing a limiting situation. The surge in oil demand and Russia’s invasion of Ukraine are fueling the rise in international oil prices. While closely monitoring the rise in international oil prices, measures should be taken for the self-employed and transporters. Another option is to lower the fuel tax further.
Rising oil prices are a factor that puts pressure on domestic prices. The National Statistical Office said oil price hikes are driving overall inflation. When the price of oil rises, the price of industrial products tends to rise. In fact, the consumer price index rose 3.7% in the previous month compared to the same month last month. This is an increase of 3% for the 5th consecutive month. After the presidential election, various public tariff increases are mentioned. Low-income people who are already struggling with the recession are getting deeper wrinkles due to high inflation and high interest rates. This is not the time to blame only the increase in international oil prices.
