Gas falls below $2 per gallon in S. Korea
November 28, 2008
SEOUL — AAFES customers in South Korea are getting an early Christmas present Friday: The price of a gallon of unleaded gasoline was to drop below $2 for the first time in years, officials announced Wednesday.
Unleaded gas was to plummet from $2.74 to $1.98 on Friday at Army and Air Force Exchange Service stations on the peninsula. Premium unleaded also dropped 73 cents to $2.26 per gallon, and the cost of diesel dropped by 23 cents to $2.76 per gallon.
"It’s a nice surprise, and it’s so much better than even a few months ago," Felicia Warner said Wednesday as she cleaned out her car at U.S. Army Garrison-Yongsan’s AAFES gas station.
Warner’s husband is stationed at Yongin, but she lives in Seoul with their four children. The couple had to cut back on weekend trips to see each other when gas prices were highest. In July, AAFES was charging $4.19 for regular unleaded in Korea.
"This makes me more likely to drive," Warner said.
Prices also were to drop Friday at AAFES stations in Japan and Okinawa, where customers have been paying $4.06 per gallon for unleaded for several months because of the way the Defense Energy Support Center contracts for gas there.
While not as high as Japan and Okinawa, prices at AAFES outlets in South Korea didn’t drop as quickly as the U.S. average because of its own contract process with South Korean fuel suppliers, said Shawn Dorcy, AAFES general manager at Yongsan.
AAFES renegotiates the cost of that fuel with the Korean company monthly, he said. That means gas prices typically stay the same for a month — something customers pay little attention to unless the price of gas fluctuates wildly in the United States, as it has in recent months.
"I’ve not seen prices fluctuate this much in a year, especially when you’re talking about a 45-day period," Dorcy said. "That’s unbelievably significant."
A gallon of unleaded cost $3.23 at AAFES in October and dropped to $2.83 on Nov. 1. AAFES adjusted the price to $2.74 on Nov. 8 because of rapidly dropping prices in the States, Dorcy said.
AAFES is dropping its prices Friday, several days before the scheduled monthly change, because of the holiday travel season.
"We’re doing what we think is the right thing by offering that lower cost on a gallon of gas," he said.
According to the Energy Information Administration, the average price of regular gasoline in the United States was $1.89 on Monday, down 18 cents from the previous week and down $1.20 from the previous year. Gas prices are at their lowest levels since before December 2006, according to the EIA.
Dorcy said AAFES prices its gasoline based on the national average, and adds a 9.17 cent dispensing fee in South Korea.
Like Warner, most customers buying gas on Wednesday said they were pleased with news of the reduction.
"Oh, it’s really good. Wonderful," said Santi Diaz, a civilian who works for a food distributor for the U.S. Army.
Some said it was time for prices to drop significantly, as they already have at off-base gas stations in the United States and South Korea.
"That’s great, but it’s about time," said John Ghim, an information management officer. He and his wife have carpooled to work to save money instead of driving separate cars.
"Now I don’t have to be so cautious about the price of gas," he said. "I’m less concerned."
Kevin Kingsley, a civilian who works for the 1st Signal Brigade, said he was already glad prices were lower than they were four months ago, when he would stop pumping gas when he reached $60, short of filling up his tank.
"I didn’t want to see $67 on my bill," he said.
He was happy but cautious.
"I don’t know how long it’s going to stay there," he said of the under-$2 price.
New pricesAAFES gas prices in South Korea, effective starting Friday
Unleaded:Was: $2.74Now: $1.98
Premium unleaded:Was: $2.99Now: $2.26
Diesel:Was: $2.99Now: $2.76