"North Korean officials said that it's hard for them to ensure a stable power supply to the venue for a joint cultural event, because it's a facility built by South Korea,'" the government official said. "I think we should ship diesel there."

But supplying refined oil products like diesel to the North could violate UN Security Council sanctions.

South Korea will ship about 10,000 liters of diesel to North Korea's Mt. Kumgang resort for a celebration on the eve of the Pyeongchang Winter Olympics, a government official here said Sunday.

The government only wants it to power a generator there, but there is a risk that the regime could pilfer it for its own ends.

A UNSC resolution from December limits North Korea's import of refined oil products to 500,000 barrels a year. Ten thousand liters is about 63 barrels.

"It's still early in the new year, so we can avoid controversy over a possible sanctions violation if we report the amount to the UNSC," the official said.

But Section 104 of the U.S.' North Korea Sanctions and Policy Enhancement Act signed by President Donald Trump last August stipulates that he "shall designate any person (or subsidiary or agent) that knowingly" supplies refined petroleum to the North as subject to U.S. sanctions. In other words the U.S. will have to give express permission.

The official said Seoul "will avoid controversy by prior consultation with Washington."