ID :
197251
Tue, 07/26/2011 - 11:40
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Shortlink :
https://oananews.org//node/197251
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S. Korea mulls 'alternative gas stations' to curb fuel prices
SEOUL, July 26 (Yonhap) -- South Korea is considering a plan to allow the setup of "alternative gas stations" that would sell fuel products at cheaper prices, in an effort to help curb rising energy costs, the government said Tuesday.
Designed to break up the current fuel distribution system dominated by oil refiners, the plan calls for importing refined oil products from abroad and supply alternative gas stations with them through a franchise network.
State-run Korea National Oil Corp. (KNOC) will be tasked with importing petroleum products from such places as Singapore for distribution, the Ministry of Knowledge Economy said.
At present, several refiners effectively dominate the local oil market and have drawn fire for making large profits at the expense of consumers. High prices have also been blamed for triggering inflationary pressure.
The ministry said the new types of gas stations can be operated by public organizations and groups of small-sized entrepreneurs, with the government to help find necessary land needed to build such outlets.
These gas stations can be set up in public parking lots, land owned by the government and in new housing development areas where land prices are not excessively high.
"To ensure minimum levels of profit, the government may give subsidies and devise other support that can keep prices low," the ministry said. "If the plan moves forward, such gas stations could account for roughly 10 percent of the total."
Related to the plan, the Korea Oil Station Association said it opposes such a move that can hurt existing gas stations and distort the market.
"The profit margin of gas stations are not high and the latest proposal can only be seen as a move to exert pressure on the market," an association source said.
Earlier in the year the government pushed refineries to lower gasoline prices by 100 won per liter to tame inflation, but oil companies have started to mark up prices this month.
Others in the refinery industry said that it may not be realistic for KNOC to import fuel, since cost of bringing products into the country and paying import duties will offset any initial price advantage.
Designed to break up the current fuel distribution system dominated by oil refiners, the plan calls for importing refined oil products from abroad and supply alternative gas stations with them through a franchise network.
State-run Korea National Oil Corp. (KNOC) will be tasked with importing petroleum products from such places as Singapore for distribution, the Ministry of Knowledge Economy said.
At present, several refiners effectively dominate the local oil market and have drawn fire for making large profits at the expense of consumers. High prices have also been blamed for triggering inflationary pressure.
The ministry said the new types of gas stations can be operated by public organizations and groups of small-sized entrepreneurs, with the government to help find necessary land needed to build such outlets.
These gas stations can be set up in public parking lots, land owned by the government and in new housing development areas where land prices are not excessively high.
"To ensure minimum levels of profit, the government may give subsidies and devise other support that can keep prices low," the ministry said. "If the plan moves forward, such gas stations could account for roughly 10 percent of the total."
Related to the plan, the Korea Oil Station Association said it opposes such a move that can hurt existing gas stations and distort the market.
"The profit margin of gas stations are not high and the latest proposal can only be seen as a move to exert pressure on the market," an association source said.
Earlier in the year the government pushed refineries to lower gasoline prices by 100 won per liter to tame inflation, but oil companies have started to mark up prices this month.
Others in the refinery industry said that it may not be realistic for KNOC to import fuel, since cost of bringing products into the country and paying import duties will offset any initial price advantage.
