Operator association resists government’s plan to open more inexpensive oil stations


Gas station operators have threatened to close temporarily at the same time unless the government halts plans to open more discount gas stations in their efforts to curb rising gasoline prices.

The Korea Oil Station Association claimed on Friday that the government’s policies to increase discount gas stations disregard the gas station market which is suffering from its worst-ever financial strain. KOSA said the market’s yearly sales profit rate barely reaches 4 percent.

“We strongly request the government to immediately stop factitious, competition-encouraging policies in the already overheated gas station market. We urge, instead, for the government to push policies that can satisfy both the consumers and the gas station market like allowing gas stations to sell multiple products from different refiners or activating electronic commerce,” said Kim Mun-sik, head of KOSA.

The government recently announced plans to open up to 1,000 discount gas stations throughout the nation by the end of the year, including “mini” discount gas stations at some 10 spots, including parking lots of public institutions like Korea Post’s distribution centers. There are currently 371 discount gas stations in the country.

The state-run Korea National Oil Corp. recently established a support center and a task force which began operation last month with the aim to set up over 1,100 more discount gas stations in the country until 2015 and to curb petrol prices.

Minister of Knowledge Economy Hong Suk-woo told the press earlier this month that “more discount gas stores should open to enhance competition between oil stations.”

KOSA, however, asserted that the gas station market is already supersaturated and some are even shutting down due to the government’s excessive competition-encouraging policies. The number of gas stations throughout the country decreased for the first time from 13,003 in 2011 to 12,907 as of April this year, according to KOSA.

“Opening new gas stations in a situation like this only means the government is irresponsibly turning away from the financial difficulties of the market, and giving benefits to a few gas stations with taxes squeezed from the common people,” said an official at KOSA at an interview with a local media.

About the government’s plans to find new ways of selling gas, such as by selling it in cans, the official pointed out that it is a “typical on-paper plan” which does not think of the safety of consumers, not to mention the situation of the oil station market.

By Park Min-young  (claire@heraldcorp.com)