Petrol prices pumped up in Pyongyang

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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.

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Retail prices have gone up around 20 percent in two months, Agence France-Presse saw in the capital- 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 programs, and it launched two intercontinental ballistic missiles (ICBMs) in July that appeared to bring much of the US mainland into range.

Kim and US President Donald Trump have since engaged in a war of words, heightening 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.

China—by far the North’s biggest supplier and key diplomatic protector—confirmed in a statement late Friday it would adhere to the new sanctions from October 1.

Exports of refined products will be capped at 2 million barrels a year beginning in 2018.

Under the sanctions, crude oil exports are limited to current levels. China has not issued official figures for its crude sales to its neighbor 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 percent in oil product supplies, and it appears to be having an effect in Pyongyang.

In North Korea petrol is sold by the kilogram rather than the liter, 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 percent 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 Agence France-Presse 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!”

Reduced fuel supplies would lead to problems with logistics and transport, Andrei Lankov of Korea Risk Group told Agence France-Presse.

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

Limits
China will limit exports of refined petroleum products to North Korea starting October 1, its commerce ministry said, confirming Beijing’s participation in new UN sanctions intended to rein in its rogue neighbor.

In a statement posted to its website late Friday night, the ministry reiterated the terms of the latest resolution, writing that UN member states would not export more than 500,000 barrels of refined petroleum products to the North in the final three months of 2017, and 2 million annually starting next year.

“Chinese government authorities will issue a notice based on the export situation when approaching the upper limit, and from that date implement a prohibition on exports of refined oil products to North Korea for the year,” it said.

It added that China has issued a “comprehensive ban on imported textiles” from North Korea, reiterating another clause of the new sanctions that prohibits trade in both fabric and clothing.

Experts say this move could cut off a major source of foreign currency for Pyongyang, as textiles are one of country’s major exports, estimated by IHS Markit analysts to value $750 million.

China supplies materials to the North, where they are made into clothing in factories using cheap labor, and often re-exported to China.

The US has accused Beijing of not doing enough to pressure Pyongyang into abandoning its nuclear program.

China halted iron, iron ore and seafood imports after the previous round of sanctions against North Korea in August.

AFP

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