- Domestic petrol market to fall sharply on July 11
- Rising petrol prices challenge inflation control efforts
According to details given by the General Department of Customs, June alone witnessed the country import 717,000 m3 of petroleum with a total value of US$812 million, a decline of 19% in volume and 9% in value over the previous month.
The department assessed that the Republic of Korea (RoK) was the largest supplier of petroleum to the country in the reviewed period, making up 40% of the total. In addition, the nation imported 1.9 million m3 of petroleum worth US$2 billion, up more than two fold in volume and 3.8 fold in value compared to the same period from last year.
Furthermore, the price of petroleum imported from the RoK stands at US$1,063 per m3, an annual increase of 84%.
This sharp increase can be attributed to free trade agreement signed between the two countries coming into force, with tax being set at 10% on imported petroleum from RoK.
As a result of these measures, the Ministry of Finance again proposed the Government move to lower the most-favored-nation (MFN) tariff placed on unleaded gasoline to 10% from 20%, as opposed to the figure of 12% previously suggested. This is along with efforts to cut the environmental protection tax placed on fuels.
The Ministry said the reduction would not help to reduce the domestic petroleum price however, particularly as it would encourage domestic enterprises to diversify petroleum supply from other countries, such as China, the United States, and Middle East nations. This would therefore avoid dependence on a few partners, especially if the supply in the global market fluctuates.
