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North Korea fuel prices soar after U.N. sanctions capping supply
September 18, 2017 / 3:46 AM / 3 months ago

North Korea fuel prices soar after U.N. sanctions capping supply

(Reuters) - Gasoline and diesel prices rose sharply in North Korea after its sixth nuclear test and as the U.N. Security Council imposed new sanctions capping fuel supply, market data analysed by Reuters on Monday showed.

FILE PHOTO: A car drives past residential buildings in Pyongyang April 11, 2012. REUTERS/Bobby Yip/File Photo

The Security Council unanimously passed a resolution on Sept. 11 banning exports of condensates and natural gas liquids to the North and capping the annual supply of refined petroleum products at two million barrels and crude at its current levels.

The price of gasoline sold by private dealers in the capital Pyongyang and northern border cities of Sinuiju and Hyesan spiked to $2.51 per kg as of Sept. 13, up 45.1 percent from $1.73 per kg on Sept. 5, according to Reuters analysis of data compiled by the Daily NK website.

The website is run by North Korean defectors who collect prices via phone calls with traders in the North.

Diesel prices also surged 61.5 percent from $1.30 per kg to $2.10 per kg during the same period.

Lee Sang-yong, who speaks regularly to sources inside the North and supervises market data from them, said the price hikes were caused primarily by a cut in supplies as the regime scrambles to hoard fuel, wary of a potential fuel crunch.

“North Korean authorities are likely to have intentionally reduced supplies in the market after the nuclear test, thinking the U.N. Security Council sanctions would affect their own repository,” Lee said.

“In addition, astute traders are cutting their supplies on the expectations that the prices would go up further, while there’s some psychological effect among ordinary citizens who worry about war.”

U.N. Ambassador to the United Nations Nikki Haley said on Sunday the Security Council has run out of options on containing the North’s nuclear programmer and Washington may have to turn the matter over to the Defense Department.

North Korea launched a missile over Japan into the Pacific Ocean on Thursday in defiance of the new Security Council.

White House national security adviser H.R. McMaster said on Friday, after the latest North Korean missile launch, that the United States was running out of patience: “We’ve been kicking the can down the road, and we’re out of road.”

The latest gasoline price represents a 70.7 percent and 153.5 percent surge compared with statistics posted on June 8 and Dec. 1, respectively, less than one week after the Security Council adopted its last two resolutions on North Korea.

North Korea gets most of its fuel from China and some from Russia. U.S. and South Korean officials have said the North imports some 4.5 million barrels of refined petroleum products and two million barrels of crude oil each year.

Editing by Jack Kim; Editing by Michael Perry

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