Breaking: North Korea on the brink of collapse

An acute shortage of gasoline in the North Korean capital of Pyongyang that has sparked price hikes and hoarding is raising fears of potentially crippling pain at the pumps if things don’t get better soon — and driving rumors that China, after being pushed by Trump, is to blame.

The shortage, which is extremely unusual if not unprecedented, began last week when signs went up at gas stations around the city informing customers that restrictions on sales would be put in place until further notice. With no indication as of Wednesday night of when the restrictions might be lifted — or why they have been imposed — drivers continue to scramble to fill up their tanks and whatever other containers they can find.

Prices, meanwhile, have shot up. They had been fairly stable, typically at about 70-80 cents a kilogram, but on Wednesday at least one station was charging $1.40. Gasoline is sold by the kilogram in North Korean filling stations. One kilogram is roughly equivalent to one liter, so a gallon at the station costs about $5.30.

China supplies most of energy-poor North Korea’s fuel, and in lieu of official explanations, rumors are rife that Beijing is behind the shortage. The concerns are adding to a tense and uncertain mood on the Korean Peninsula since U.S. President Donald Trump assumed office with repeated calls for Beijing — Pyongyang’s economic lifeline — to get tough on North Korea, which has responded with counterclaims Washington is pushing for a nuclear war.

There are indications Beijing is obeying Trump’s orders. Rumors say China has been quietly tightening enforcement of some international sanctions aimed at getting Pyongyang to abandon its development of nuclear weapons and long-range missiles.

Limiting the oil supply has been openly discussed in Beijing as one option. Whether that is actually happening is unclear.

David von Hippel, a senior associate with the Nautilus Institute who specializes in energy and environmental issues, said supplies of crude oil and oil products would drop markedly without Chinese imports.

Indeed, two days after the restrictions were announced, North Korea’s state-run Korean Central News Agency carried an unusually acerbic, and even threatening, editorial denouncing “a country around the DPRK,” an obvious if not explicit reference to China. DPRK is short for North Korea’s official name — the Democratic People’s Republic of Korea.

“The DPRK’s nuclear deterrence for self-defense … is by no means a bargaining chip for getting something,” the commentary said, adding that if “the country” keeps applying economic sanctions “while dancing to the tune of someone … it may be applauded by the enemies of the DPRK but it should get itself ready to face the catastrophic consequences in the relations with the DPRK.”

If the apparent shortages are being caused by China, he said, the most likely explanation would be that less fuel is flowing across the border via pipeline.

Such a slowdown or stoppage would have an immediate impact on prices and would take time to compensate for by ships, trucks or trains. The primary place for North Korea pipeline storage tanks in China is in the border city of Dandong. But it was also not clear if North Korean tankers were picking up as much fuel as usual.