Forget what the Korea Herald (Korea's English-language newspaper) says about fuel prices. Statistics are OK as far as they go, but these pictures show what people really pay. I've shot pictures of the same gas station's sign every time we've been in Kangnung (Gangneung), and you can see above what's been happening over the years since Margaret started teaching there.

Between May and September of 2000, when most of the rest of the world was seeing eye-popping price increases, gasoline prices in Korea rose only 9 percent.

But look at the next line down. That's for kyong yoo (light oil, or diesel fuel). Over the same 4 months it shot up 18 percent. By 2004 gasoline had increased only 14% over May 2000, but diesel was up 63%. Fast-forward to 2006 -- gas is up 28% over May 2000, but diesel fuel has more than doubled.

What's going on here? Korea has no petroleum and imports all that they use, so their government is tinkering. And so far they haven't had the best results.

Until the 1980s not many Koreans could afford cars. As they got more affluent and took the plunge, they mostly bought tiny, high-MPG cars. But no more. Gas-guzzling SUVs and vans are now the hot ticket.

You might be surprised to hear that the US has something to do with this. In the late 1990s, the American government pushed Korea to cut their purchase and use taxes on large vehicles. Why? Because US automakers wanted to sell in Korea, but US automakers don't make tiny cars.

At the time, it wasn't legal to sell small diesel or LP gas cars in Korea. Diesel produces better mileage but more smog. LP gas gives lower mileage but much less smog. Both were supposed to be used only in commercial vehicles, and both were made extra cheap (the Korean government sets the prices).

Korea's automakers realized that by selling big trucks instead of cars, they could build them to use diesel or LPG. (Sounds a lot like what the US automakers did here.) But there wasn't any point since nobody could afford them - until the US came along and twisted Korea's arm. With the taxes reduced on 7-passenger SUVs, it didn't matter (to the owners) that they got half the mileage, because the fuel was half the price. If you didn't peek, you can guess what happened.

The Korean government is trying to patch things up. Since 2005 it's been legal to sell small cars that run on diesel fuel. They've also raised the price on diesel drastically - 128% since 2000. That may get some Koreans back into small cars, but it will also foul Korea's already murky air still further (diesel exhaust is pretty hard to clean up compared to gasoline).

By the way, how do you suppose gas stations compete when the government sets the price? On "service." The Korean concept is a little different from ours, though. We'd say "service" means washing the windows, checking the oil, maybe putting air in the tires. But in Korea "service" means a free bonus. Want a pack of Kleenex with that fillup?