The Korea Oil Station Association strongly objected to a government decision to cut fuel prices at highway gas stations nationwide by 100 won per liter during the Chuseok holiday.
In a statement on the 18th, the association said applying an additional price cut only to highway stations would widen the gap with ordinary stations and distort normal price competition. "This is no different from telling independent gas stations to close for Chuseok," it said.
The government said the same day that fuel prices at highway gas stations across the country would be reduced by 100 won per liter from Sept. 24 to 27, during the Chuseok holiday. The stated aim is to have the public sector share the burden of high oil prices and lower fuel costs for holiday highway travelers. The measure covers 226 stations on state-funded expressways managed by Korea Expressway Corporation.
The association said the burden on operators is growing because of the recent surge in international oil prices and the narrowing of distribution margins under a ceiling price system for petroleum products. "If only highway stations sell at lower prices during the Chuseok holiday under these conditions, ordinary stations on national roads and in urban areas could also suffer customer losses and lower sales volumes," it said.
The group said it agrees with the policy's goal of easing the burden of high fuel prices on the public but that the government should not demand another sacrifice from independent stations by artificially lowering prices at only certain outlets.
The association said gas stations are already struggling as distribution margins have narrowed between the wholesale prices set by refiners and the maximum retail prices set by the government, while card fees, transportation costs, wages, rent and electricity charges have all risen. Without separate support, it said, stations cannot absorb a 100-won-per-liter price gap with highway outlets.
"If the benefits of a price cut are concentrated on certain gas stations in the name of easing the public's burden, normal price competition will be distorted and independent gas stations will ultimately bear the damage," the association said. "If the government pursues a price-cut policy, it must prepare substantive support measures and loss compensation so that gas stations nationwide can take part together."
