North Korea’s expanded imports of oil appear to have led to a fall in the prices of gasoline, diesel and other oil-based products in North Korea, Daily NK has learned.
According to Daily NK’s regular survey of prices in North Korea, the market price of a kilogram of gasoline was KPW 13,000 in Pyongyang, KPW 12,000 in Sinuiju and KPW 12,500 in Hyesan as of Oct. 16.
Compared to August, when the market price of gasoline in Pyongyang peaked at KPW 16,000, the price had fallen 19%. Gasoline prices had fallen 22 to 23% in Sinuiju and Hyesan, too, compared to their peak in early September.
The market price of diesel fell even more dramatically over just around two weeks. A kilogram of diesel was KPW 10,500 in Pyongyang, KPW 9,600 in Sinuiju and KPW 10,000 in Hyesan as of Oct. 16. Compared to Oct. 3’s survey, when a kilogram of diesel cost KPW 12,700 in Pyongyang, KPW 13,000 in Sinuiju and KPW 12,900 in Hyesan, prices had fallen by 17-26%.
The fall in North Korean oil prices compared to August appears partially influenced by international oil prices, which have been gradually falling since peaking in June of this year.
In fact, the spot price of West Texas Intermediate (WTI) crude on the New York Mercantile Exchange had fallen to USD 81 a barrel as of Oct. 18, after spiking to USD 123 in early June. With WTI, Brent Crude and Dubai Crude prices all falling, the market price of oil in North Korea may have been affected as well.
That being said, supply is the major factor directly impacting oil prices in North Korea. The country’s oil prices tend to quickly fall when supplies increase from China, North Korea’s chief oil supplier.
According to a high-ranking Daily NK source in North Korea last Thursday, North Korea received a large-scale shipment of oil from China ahead of the recent Chinese Communist Party (CCP) congress. Basically, China appears to have gifted the oil at a low price to North Korea as a goodwill gesture to an ally ahead of the party congress.
The source claimed that North Korea’s congratulatory message for the CCP congress, which expressed support for the Chinese party led by President Xi Jinping, had something to do with this as well.
Daily NK understands that the latest oil shipment was delivered not by ship, but by the China-North Korea pipeline that connects the Chinese city of Dandong with North Korea’s Ponghwa Chemical Factory in Paengma-ri, Pihyon County, North Pyongan Province. In fact, a Daily NK source said earlier this month that dozens of transportation trucks entered the Ponghwa Chemical Factory and left loaded with oil.
Moreover, with Russian opposition recently scuttling discussion of additional UN Security Council sanctions on North Korea, Pyongyang has reportedly been using the opportunity to begin full-scale energy imports from Russia, including oil.
In fact, North Korea imported large amounts of oil from Russia through the port of Najin this month, after having done so in August as well, according to a Daily NK source in North Korea.
As a result, the amount of imported oil from China and Russia increased this month, influencing the fall in North Korean market oil prices as organizations across the country receive greater supplies of oil than usual.
However, there is speculation in North Korea that the fall in market oil prices in the country is just a temporary phenomenon.
A source in North Pyongan Province said the current drop in oil prices would be short-lived.
“The price of oil fell this month because a bit more oil entered the country thanks to the CCP congress,” he said, predicting that, “It’s unlikely that the fall in prices will continue.”
Please direct any comments or questions about this article to dailynkenglish@uni-media.net.
