Oil prices in North Korea are climbing even faster than domestic exchange rates and international oil prices.
This comes as international oil prices skyrocket due to the continued war in Ukraine.
North Korean authorities are apparently fanning the local spike by restricting sales of oil products to counterbalance import shortfalls.
According to Daily NK’s regular survey of prices in the country, a kilogram of gasoline cost KPW 12,700 in Pyongyang, KPW 11,800 in Sinuiju, and KPW 12,300 in Hyesan as of Sunday.
In Pyongyang, the price had climbed close to 90% compared to Jan. 11, when a kilo of gas cost just KPW 6,680 in Pyongyang, KPW 6,970 in Sinuiju, and KPW 7,440 in Hyesan.
North Korean diesel prices have been rising even faster than gasoline as of late. The market price for a kilogram of diesel was KPW 9,450 in Pyongyang, KPW 9,340 in Sinuiju, and KPW 9,260 in Hyesan as of Sunday.
The price of diesel in Pyongyang had climbed 112% compared to Jan. 11. That is to say, it more than doubled in just three months.
Apparently driving the climb in local oil prices is the spike in international oil prices, as well as rising exchange rates with the restart of China-North Korea freight train service sparking higher expectations regarding normalized trade.
However, North Korean oil prices are climbing much faster than either international oil prices or the KPW-USD or KPW-RMB exchange rates.
A barrel of Dubai crude cost USD 109.2 on Friday, up 36% from Jan. 11, when it cost USD 80.21 a barrel.
North Korean exchange rates have climbed about as much as international oil prices. The dollar was trading at KPW 6,450 in Pyongyang, KPW 6,520 in Sinuiju, and KPW 6,610 in Hyesan as of Sunday. This was up 36 to 42% from Jan. 11, depending on the region.
Chinese yuan, too, was up 35-37% from the start of the year, trading at KPW 810 in Pyongyang, KPW 815 in Sinuiju, and KPW 850 in Hyesan as of Sunday.
Gasoline and diesel prices climbed 90% and 112%, respectively, in Pyongyang during the same period, a dramatic spike compared to the rise in international oil prices and local exchange rates.
Daily NK has determined that measures taken by North Korean authorities regarding petroleum products are a factor in skyrocketing market prices for oil.
According to a source in North Korea on Tuesday, North Korean authorities have recently started restricting private sales of oil in markets.
He said the authorities allow purchases of gasoline or diesel only at state-licensed oil distribution centers. They have banned individuals from selling oil in markets.
If the authorities catch individuals selling oil in markets, they reportedly confiscate all the seller’s oil without compensation.
The ban on individual sales of oil aims to provide the state and government bodies with priority deliveries of oil and restrict individual oil use. This comes as oil imports grow financially onerous due to the spike in international oil prices and climbing local exchange rates.
However, North Korean authorities may face difficulties in putting a complete stop to private oil sales as demand for oil spikes in the transportation and agricultural sectors, intensified official crackdowns on these oil sales notwithstanding.
“While it may seem like people’s use of oil has fallen now, ultimately oil prices will likely rise even more because of the fall in consumption,” the source said, adding, “If ordinary people can’t make a proper living, that will also damage the country.”
