Oil prices in North Korea plummeted late last month after climbing at the start of the year. North Korea has reportedly been receiving supplies of oil from China as the two nations show signs of growing closer.
The price of diesel was KPW 3,500 in Pyongyang, KPW 6,000 in Sinuiju and KPW 6,300 in Hyesan as of Jan. 25. This was respectively 56%, 24% and 23% less than it was on Jan. 11, as determined by Daily NK.
The price of oil, on which North Korea completely depends on imports, fluctuates relatively wildly depending on supply. Even so, this was a 23-56% fall in just two weeks.
Particularly in the case of Pyongyang, the price of diesel fell to KPW 3,500, the first time it has done so since 2011, a decade ago.
Gasoline prices fell relatively less than diesel. Gasoline was KPW 10,000 a kilogram in Pyongyang, KPW 11,000 in Sinuiju and KPW 12,000 in Hyesan as of Jan. 11. As of Jan. 25, it was KPW 6,700 in Pyongyang, KPW 11,000 in Sinuiju and KPW 11,100 in Hyesan.
As in the case with diesel, the price drop for gasoline was most pronounced in Pyongyang, where prices fell 33% from Jan. 11.
In Hyesan, however, gasoline prices fell just 7.5% from two weeks earlier, and in Sinuiju they did not change at all.
Diesel prices fell more than gasoline prices because the new supplies from China reportedly focused on diesel.
According to a source, diesel accounted for a large share of the imports smuggled into North Korea by way of illegal transhipment in international waters from ships leaving the Chinese port of Dalian in Liaoning Province.
The source claims North Korea has smuggled oil from China “countless times” since the middle of last month.
Prices fell most precipitously in Pyongyang seemingly because the capital received not only the first supplies but also the most.
Gasoline imports reportedly began from the middle of last month as well, together with diesel. But after gasoline was supplied to Pyongyang, distribution was temporarily suspended to other areas of the country.
The source said gasoline distribution was stopped due to “Chinese intervention.” The Chinese side signed the deal to provide gasoline and diesel on the condition that North Korea distribute only to the private sector rather than to the military, but North Korean authorities failed to abide by this.
Gasoline supplies were temporarily suspended when a Chinese official learned that oil imported from China went into military oil storage facilities.
Because of this, gasoline prices in Sinuiju and Hyesan began recovering at the start of last month after falling slightly.
With oil prices dropping suddenly, North Korean authorities have begun controlling distribution to nip signs of hoarding in the bud.
With growing numbers of people storing gasoline and diesel due to the falling prices, authorities have reportedly sent “Ministry of Social Security military task forces” to markets to keep an eye on what oil merchants are doing.
In particular, the task forces are threatening to confiscate all the oil from merchants who are caught selling it in bulk.
Meanwhile, there is also talk that North Korea sold some fishing rights in return for Chinese oil provisions. However, this rumor remains unconfirmed by Daily NK.
Relations between North Korea and China appear to be growing warmer. China’s foreign ministry said on Monday that Chinese State Councilor and Foreign Minister Wang Yi exchanged New Year’s messages with North Korean Foreign Minister Ri Son Gwon. In his message, Wang said he hopes China and North Korea closely communicate in the New Year and “bring greater fortunes to the people of both countries” by steadily developing bilateral ties.
Prior to this, China’s Defense Ministry emphasized that Beijing’s unchanging policy is the maintenance and development of the traditional friendship between North Korea and China. In a briefing on Jan. 28, Chinese Defense Ministry spokesperson Wu Qian said military ties between Beijing and Pyongyang were important and had brought “positive contributions” to the strengthening and development of bilateral ties, and that friendly exchanges at all levels would continue between the two militaries going forward as well.