Friday, March 29, 2024 | Ramadan 18, 1445 H
clear sky
weather
OMAN
25°C / 25°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Petrol prices pumped up in Pyongyang

1115563
1115563
minus
plus

PYONGYANG: Petrol prices are being pumped higher in Pyongyang in the wake of United Nations sanctions restricting exports of oil products to nuclear-armed North Korea.


Retail prices have gone up around 20 per cent in two months and are now more than double what they were at the beginning of the year.


Two weeks ago the UN Security Council imposed its eighth set of sanctions on the North in an effort to rein it in following its sixth nuclear test, which Pyongyang said was a hydrogen bomb.


Under leader Kim Jong-Un North Korea has made rapid progress in its weapons programmes, and it launched two intercontinental ballistic missiles (ICBMs) in July that appeared to bring much of the US mainland into range.


North Korean leader Kim Jong-Un and US President Donald Trump have since engaged in a war of words, heightening the tensions.


The latest UN sanctions for the first time imposed limits on supplies to the North of the fuel it needs to keep its citizens and soldiers moving.


Crude oil exports are limited to current levels, and refined products are capped at 2 million barrels a year.


China — by far the North’s biggest supplier and key diplomatic protector — has not issued official figures for its crude sales to its neighbour for several years.


But according to the US mission to the United Nations, Beijing provides Pyongyang with around 4 million barrels a year of crude oil, and 4.5 million barrels of refined oil products such as petrol and diesel.


There is a livelihood exemption in the rules, but the measures would seem to amount to a cut of more than 55 per cent in oil product supplies, and it appears to be having an effect in Pyongyang.


In North Korea petrol is sold by the kilogramme rather than the litre, and payment in hard currency is required for retail buyers.


“It was $1.90 yesterday, today it is $2,” said a petrol station employee. “I expect the price will go up in the future.”


In January prices were below $1 per kilogram, and stood at around $1.65 in July, so they have gone up about 20 per cent in the last two months and more than doubled so far this year.


There is significantly less traffic on the roads in Pyongyang than earlier this year, although reporters in the capital have not seen any evidence to back up Trump’s tweet that: “Long gas lines forming in North Korea. Too bad!”


Trump dubbed Kim “Rocket Man” in a speech at the United Nations last week in which he threatened to “totally destroy” the North if it attacked the US or its allies.


In a statement on Friday Kim responded by calling the US head of state “mentally deranged” and a “dotard” who would “pay dearly” for his comments — triggering Trump to describe him as a “madman”.


The increasingly bellicose rhetoric — in recent months Pyongyang has threatened to bracket the US territory of Guam with a missile salvo and Washington warned that military action was an “option on the table” — has raised fears of a physical conflict.


Even so analysts say that the economic consequences of sanctions will do nothing to dissuade Pyongyang, which says it needs nuclear weapons to defend itself against the threat of invasion.


Reduced fuel supplies would lead to problems with logistics and transport, Andrei Lankov of Korea Risk Group said.


But he added: “Even if economic problems lead to starvation, the policy will not change.”


One litre of petrol weighs 0.77 kilograms, so the current Pyongyang price is equivalent to $2.59 per litre.


In contrast, average retail prices in South Korea — which, like the North, has few hydrocarbons of its own — were only about half as much last week at 1,485 won per litre, or $1.31.


Residents of the North Korean capital say the recent increases have come in a series of small steps.


Prices had already jumped around April, which analysts said at the time could have been due to stockpiling by the authorities in anticipation of an embargo.


Beijing has reiterated that it would adhere to the latest UNSC measures.


“The market is anticipating the worst — a cut-off or decrease in supply via China — and the authorities are using price rises along with other control mechanisms to absorb the pain in advance,” said John Delury of Yonsei University in Seoul.


But the impact on the regime could be limited, he added.— AFP


SHARE ARTICLE
arrow up
home icon