By Kim Tae-jong
Gasoline prices have approached 2,000 won per liter for the first time in history.
According to Opinet, an oil price information website run by the Korea National Oil Corporation (KNOC), the average gas pump price reached 1999.76 won as of 11 p.m. Sunday, the highest level ever. The average level in Seoul also hit a record high at 2078.75 won.
Gas pump prices have been on the increase for over 50 consecutive days, renewing records for four straight days. The previous high was 1993.17 won on Oct. 23 last year.
The surge is attributed largely to the increasing crude oil prices amid concerns over the tension in Iran.
“Oil prices are expected to continue its upward trend for the time being due to the Iran crisis,” a KNOC official said.
Iran has been hit by a raft of economic sanctions by the United States, the United Nations and the European Union over its refusal to halt uranium enrichment activities. In response, the Islamic republic has threatened to cut off crude exports to Europe after the European Union announced it would stop buying Iranian oil.
The price of Dubai crude oil exceeded the $120 mark per barrel last week for the first time since August 2008. Dubai crude is the benchmark of the nation’s oil prices.
The government is now facing strong demand to lower oil taxes from politicians and civil groups ahead of the April 11 National Assembly elections but says it has no immediate plans to accept the demands.
“We have a contingency plan in case the price of Dubai crude surpasses $130,” Strategy and Finance Minister Bahk Jae-wan told reporters last week. “I don’t think it’s right to break the principle.” When the price of Dubai crude topped $140 per barrel in July 2008, the government temporarily slashed oil taxes by 82 won per liter.
Oil companies have also expressed difficulties in trimming prices despite the government’s continued request to join efforts to tame soaring inflation by doing so. They have pointed the finger at credit card firms and the government itself for the high gas prices.
“The real culprit is fuel taxes and commission taken by credit card firms,” said an official from one of the nation’s oil refiners, who declined to be named.