As the government implemented a "maximum oil price system" to rein in surging fuel prices amid the Middle East crisis, refiners sharply cut volumes sold to spot agents, dealing a direct blow to self-brand gas stations and some independent stations that had typically bought cheaper fuel from spot agents. Spot agents are wholesalers that buy in bulk and sell the cheapest fuel of the day among volumes offered by multiple refiners.
Self-brand gas stations, known as "no-pole" stations, do not carry a specific major refiner's brand and instead procure fuel from whichever wholesaler is the cheapest that day and sell it under their own label. As each refiner limits shipments to its own branded stations, small gas stations that relied on spot agents are increasingly concerned.
According to the gas station industry on the 17th, some stations said they were notified by the four refiners (SK Energy, S-Oil, HD Hyundai Oilbank, GS Caltex) that they could order up to 110%–120% of their usual monthly usage.
This is a measure to prevent hoarding. Since they are allowed to buy 10–15 percentage points (P) more than the original order volume, the mood is that if stations place orders with refiners even after the price cap took effect, supply to stations remains smooth.
In contrast, spot agents are struggling as they fail to secure volumes. When oil prices surge or fuel supply is tight, refiners first cut volumes sold to spot agents. That is because they must stably supply company-operated stations and independent stations under supply contracts first.
Selling to their own brand stations is also better in terms of profitability. From a refiner's perspective, selling to spot agents is akin to offloading large volumes of fuel at low prices.
As spot agents struggle to secure volumes, not only no-pole stations but also independent stations that had received some supply from spot agents are being affected. That is because even some independent stations under contracts with specific brands had been sourcing part of their fuel from spot agents.
"Blended sales," or mixing fuels, used to be illegal but has been legal since the government implemented its "measures to improve the petroleum products market" in 2012. Instead, stations must post a notice reading "blended sales gas station."
A gas station operator said, "To compete on price with company-operated and budget stations, we have no choice but to source fuel from spot agents," adding, "We filled our tanks with roughly 80% refiner supply and 20% spot agent supply, but recently spot agents have stopped taking orders altogether, and we are facing shortages."
With spot agent supply cut off, placing additional orders with refiners is not an option. That is because refiners are implementing a quota system based on the volumes stations usually order. If a station typically relied heavily on spot agents, it is facing a corresponding shortfall.
Another gas station operator said, "The (refiner's) branch said it would give us the usual volume we buy," adding, "The problem is the tank is empty by the amount we used to receive cheaply from spot agents, and there is no way to fill it."
The refining industry points to a distorted distribution structure in which spot agents sell fuel to brand-name stations as the problem. A refiner official said, "After no-pole and budget stations emerged, the distribution structure for petroleum products became very complex, and spot agents began selling fuel to branded stations," adding, "When fuel supply is difficult, our principle is to manage around our own branded stations with which we have contractual relationships."
Meanwhile, according to the "public notice on the prohibition of hoarding and other acts concerning petroleum products" implemented by the Ministry of Strategy and Finance, refiners must maintain petroleum product shipments at 90% or more of the same months last year for Mar.–Apr. this year. Refusing to sell without justifiable reason or shipping excessively to certain companies is prohibited. Gas stations must not purchase or hold petroleum products excessively for the purpose of profiteering.