Following the implementation of the 7th petroleum price ceiling, domestic gas station prices have fallen below 2,000 won per liter for the first time in about two months.

If international oil prices continue their current trend of stability, domestic prices are expected to gradually normalize with a time lag of two to three weeks.

According to Opinet, the oil price information service operated by the Korea National Oil Corporation, the average retail price of gasoline at gas stations nationwide was 1,991.1 won per liter as of 9:00 a.m. on June 28.

This is a further decline from the 1,996.1 won recorded the previous day, marking the second consecutive day that nationwide gasoline prices have remained below the 2,000 won threshold.

The national average gasoline price has entered the 1,900 won range for the first time in about two months, after rising to the 2,000 won level on April 18 (2,001.5 won).

On the same day, the average retail price of diesel nationwide was recorded at 1,982.3 won per liter.

Diesel prices have remained in the 1,900 won range since falling below the 2,000 won mark on June 24 for the first time in two months.

Both diesel and gasoline prices have now dropped to the 1,900 won per liter range, with a two-day interval between them.

The downward trend in domestic fuel prices is attributed to the recent decline in international oil prices and the government's decision to lower the maximum price of petroleum products for the first time in about 100 days since the system was introduced.

Previously, the government applied the 7th petroleum price ceiling starting at midnight on June 27, lowering the prices by 150 won each to 1,784 won per liter for gasoline, 1,773 won for diesel, and 1,380 won for kerosene.

This is the first downward adjustment in 106 days since the price ceiling system was introduced.

International oil prices are also on a downward trend.

According to Opinet, the price of Dubai crude, which South Korea mainly imports, fell by 34.3% over one month, from 98.0 dollars per barrel on May 26 to 64.4 dollars on June 25.

This is lower than the 70 dollars per barrel price recorded just before the outbreak of the war between the U.S.-Israel and Iran.

However, considering existing gasoline stockpiles purchased at higher prices, it is expected to take two to three weeks for consumers to fully feel the impact of the recent drop in international oil prices.

Additionally, the timing and scale of price reductions may vary depending on the inventory situation of individual gas stations.

This is because it is burdensome for stations to lower prices immediately if they hold gasoline reserves purchased at higher costs.

Therefore, analysts suggest that domestic oil prices will continue a gradual downward stabilization trend over the next two to three weeks.

An industry official stated, "Considering the differences in inventory levels among gas stations, prices are expected to gradually fall by about 50 won per week over the next two to three weeks." The official added, "However, we must consider taxes and distribution margins, and since international petroleum product prices are still higher than they were before the war, the extent of the price reduction may be limited."

The explanation is that although international oil prices have fallen below pre-war levels, there are limits to how much domestic prices can return to pre-war levels when considering the rise in international petroleum product prices and exchange rates.

According to Opinet, the average retail price of gasoline at domestic gas stations in the fourth week of February, just before the outbreak of the war between the U.S.-Israel and Iran, was 1,691.3 won.

The international gasoline price in the fourth week of June was 100.6 dollars, which is an increase of approximately 27.7% compared to the fourth week of February (78.8 dollars) before the war.

Meanwhile, the consumer group Energy and Petroleum Market Watch stated that as of 6:00 a.m. on June 28, compared to June 26, the day before the 7th price ceiling was announced, 3,160 gas stations had lowered gasoline prices, and 3,285 stations had lowered diesel prices.

(Photo: Yonhap News)