North Korea’s gasoline and diesel prices have recently increased significantly amid the general surge in market prices following the country’s announcement of a COVID-19 outbreak.
In particular, diesel prices have increased over KPW 10,000, which may lead to negative effects on North Korea’s agricultural production and distribution activities.
According to Daily NK’s regular survey of market prices in North Korea, a kilogram of diesel was trading at KPW 10,040 in Pyongyang, KPW 10,100 in Sinuiju and KPW 10,160 in Hyesan as of Monday.
This is the first time that diesel prices have crossed the KPW 10,000 line in eight months, having previously fallen into the KPW 3,000 – KPW 4,000 range in September due to a temporary surge in imports.
Diesel prices were in the KPW 4,000 – KPW 5,000 range as recently as mid-January, meaning they have essentially more than doubled in the course of five months.
Gasoline prices have risen in recent months, too. As of Monday, the price of a kilogram of gasoline was KPW 13,200 in Pyongyang, KPW 13,100 in Sinuiju and KPW 13,600 in Hyesan. That is a 83-98% increase from Daily NK’s Jan. 11 survey of market prices, when the price of gasoline was KPW 6,680 in Pyongyang, KPW 6,970 in Sinuiju and KPW 7,440 in Hyesan.
The increase in fuel prices appears to be due in part to the decrease in Russian oil supplies and the rise in international oil prices resulting from the continuing war between Russia and Ukraine. Other major factors may include a tightening of imports due to China’s COVID-19 lockdowns and the falling value of the North Korean won, along with North Korea’s clampdown on private sales of oil.
Experts Daily NK spoke with also say that anxiety from the spread of COVID-19 may have impacted rising oil prices.
Choi Ji Young, a researcher at the Korea Institute for National Unification (KINU), told Daily NK in a phone conversation that she believed that North Korea’s trade with China would be restricted “for the time being” due to the country’s COVID-19 situation.
“That may mean that public anxiety is a major factor in the price increases,” she said.
Choi also noted, however, that when movement is restricted, demand for fuel would naturally fall. “It’s hard to conclude in any firm way which factors have a bigger influence because factors that could raise or lower prices have both been present,” she explained.
Meanwhile, the spike in North Korean oil prices along with the spread fo COVID-19 are expected to have a significant impact on the country’s agricultural activities.
“The oil used in agriculture is 100% diesel, and it’s hard to find it in markets,” a source in the country told Daily NK. “We can’t use machines, so we need to do things manually. But we can’t mobilize labor due to COVID-19, either, so work is moving slowly despite it being the farming season.”
With North Korean authorities clamping down on oil sales and directing imported oil first and foremost to state agencies, individuals are having difficulties purchasing diesel or gasoline in markets.
Cho Chung-hui, the head of the South Korean NGO “Good Farmers” and an expert on North Korean agriculture, said he had heard there are many cases of COVID-19 among students and soldiers, the “core labor force of agricultural mobilizations.”
“The sudden spike in the price of diesel needed to run farm machinery will also have a negative impact on farming this year,” he added.
Translated by David Black. Edited by Robert Lauler.
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