Private merchants and ship owners in the East Sea are fiercely competing to secure oil before the squid season begins in June, a phenomenon exacerbated by persistent rumors of a potential oil embargo by China.
“The donju (newly affluent middle class) are conspiring with the fisheries stations on the east coast to purchase massive quantities of oil from state storage facilities to prepare for the squid season,” a source in North Hamgyong Province told Daily NK on May 8.
“Donju are filling the oil tanks in the fisheries stations with at least 30-40 tons of diesel oil per transaction, purchasing the oil from state oil centers in Munchon and Daedong (Kangwon Province). The hoarding has accelerated following the spread of rumors that China may suspend the supply of crude oil,” the source added.
For the upcoming squid season, which spans four months from mid June to October, fuel oil to power the boats is essential. People are competing to secure more oil because if China cuts the supply, profit margins may take a big hit.
“The battle to secure oil affects the entire east coast fishing industry, from state fisheries stations and foreign currency-earning fisheries offshoots, to individual fisherman operating small wooden boats with only 8-12 horsepower,” the source explained.
It appears likely that private merchants will hoard large volumes of diesel and gasoline for profit-making opportunities, which will further accelerate the price hikes.
“Even the provincial private oil traders are hoarding oil for vehicles, hedging against a price increase. The price of gasoline has been fluctuating, but the average price has doubled, currently trading at 15,000 KPW per kilo,” a source in Kangwon Province reported.
“The state has reduced its provision of oil to Provincial Party Committee chairmen from 60kg per month to 40kg. Private merchants are well aware of this fact, so they are hoarding oil to sell when the price peaks.”
Meanwhile, residents in coastal areas of North and South Hamgyong Provinces and Kangwon Province are concerned over the sudden rise in oil price as they are dependent on it to catch squid and sandfish.
“There are many residents who are worried about potentially having to reduce the scale and frequency of their operations. Many are complaining about the state’s focus on nuclear weapons development, while private merchants exploit the weaknesses of [ordinary] residents,” a separate source in North Hamgyong Province added.