North Korea cracks down on private fuel sales during shortage

Authorities in North Korea are cracking down on citizens who privately sell gasoline as fuel shortages spread across the country, sources in the country told RFA.

Private ownership and sale of fuel reserves is technically illegal in North Korea but is tolerated under normal circumstances. Now that fuel is hard to come by the government is finding the private sellers and seizing their fuel.

The crackdown began at the beginning of the month, a resident of the northeastern province of North Hamgyong told RFA’s Korean Service on condition of anonymity for safety reasons.

“This investigation is a move to confiscate privately owned fuel in the country as it faces a fuel shortage,” he said. “These days in North Korea, the economic sectors including transportation, agriculture and fisheries are experiencing a severe shortage of gasoline and diesel fuel.”

Demand is higher this time of year with the start of the farming season, but fuel reserves are lower than normal because of a two-year trade moratorium with China due to coronavirus concerns. Though the ban ended at the start of 2022, trade has not yet reached its former volume, so stocks have not yet been fully replenished.

Global prices are also high right now due to sanctions on Russia for its invasion of Ukraine.

“At the beginning of this year, the price of fuel at the gas station operated by a trading company was 9,800 won per liter of gasoline [U.S. $6.17/gallon], 7,500 for diesel ($4.72/gallon),” the source said.

“No one expected that gasoline would rise to 17,000 won per liter [$10.71/gallon] or 12,000 won per liter [$7.56/gallon] for diesel by the end of March,” he said.

Prices of gas sold by individuals also shot up but is still 1,000 won cheaper per liter ($0.60 cheaper per gallon) than the government price, according to the source.

“People began to prefer trading with the individual sellers. Also, everyone knows that the fuel sold at gas stations is of inferior quality to that of private individual sellers,” the source said.

Gas stations are known to mix gasoline with cheaper fuels, such as naphtha (lighter fluid), during times of shortage. Though it stretches the gas reserves further, the adulterated gas can damage vehicles or machines intended to run on gasoline.

It was this very practice that drove people in the northwestern province of North Pyongan to flock to the individual sellers, a resident there told RFA.

“As the individual traders started selling fuels more actively, authorities began to take preliminary measures to take away their business,” the second source said.

“Residents of the city of Sinuiju believe that the reason the price of fuel is soaring these days is because of the government’s series of missile test launches. … These continuous missile launches are preventing the smooth phase-in of fuel,” she said.

She said the government tried to put price controls on gas in the city on the Chinese border, but it still has risen to unbelievable highs. Despite its proximity to China, gasoline in Sinuiju costs $7.10 per gallon and diesel costs $4.26.

“Food and other necessities are skyrocketing right now as well,” she said. “Residents are very unhappy with the police department’s crackdown on … the private sellers.”

“In springtime gas is in high demand for farming, fishing and transportation, but the authorities’ crackdown is making it difficult to get fuel because the private sellers are hiding so they don’t get caught. It is causing a major disruption to our daily lives,” the second source said.

RFA reported last month that people were trying to cash in on the fuel shortage by buying fuel vouchers in one part of the country and selling them in other parts where gas was more expensive. Fuel vouchers, however, can only be redeemed at gas stations.

Translated by Claire Lee and Leejin Jun. Written in English by Eugene Whong.