Gasoline in North Korea’s capital city of Pyongyang is now selling at prices 25% lower than last week. According to inside sources, rumors are swirling that the recent price drop is related to a recent visit by a group of Chinese diplomats.
“The falling cost of fuel is bringing some relief to servicha drivers (transportation/logistics service providers) after a prolonged period of concern,” a Pyongyang source told Daily NK in a telephone conversation on December 14. “As recently as last week, one kilogram of fuel was selling for more than 20,000 KPW, and it has now dropped to about 15,000 KPW.”
When asked about the reason for the decline, the source responded, “It isn’t clear why this has happened, but the rumor is that fuel prices started dropping after a group of Chinese dignitaries visited last month. It isn’t a completely groundless position. Some in North Korea who are well-connected to outside information believe it’s the reason.”
“The merchants have been talking among themselves, and they guessed that because the Chinese envoys came at a time of international tensions, they may have been discussing ways to alleviate the economic sanctions being levied against the North,” he continued.
North Korea receives limited oil supplies from China through ships and pipelines, but a substantial volume has been trucked over the border. The Chinese government has officially announced that it is implementing international sanctions against North Korea, including prohibitions on the export of refined oil to the North. But crude oil supplies have been exported with business continuing as normal. North Korean residents believe that China controls the crude oil supply as a way to maximize leverage over the North.
The sources also indicated that small-scale smugglers in the border regions are also bringing in a substantial amount of oil to the North.
“Gasoline prices in the border area of North Pyongan Province are also dropping. Some of the servicha operators are concerned that the prices will rise again, so they’re buying in bulk,” a source in North Pyongan Province said.
“Most residents believe that things will not be as bad as they were in the mid-1990s [when the country was struck by famine] because even if national trade halts, individual smugglers will still be able to bring in supplies to a certain extent. In addition, some residents believe there are some positive side effects to the sanctions. [Because North Korea is banned from exporting seafood,] there is now a much larger availability of seafood in the [domestic] market.”