As the government implemented a "maximum oil price system" to rein in surging fuel prices driven by the Middle East crisis, refiners sharply cut volumes sold to spot agents, dealing a direct blow to self-branded gas stations and some independent stations that usually 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-branded gas stations, commonly called "no-pole" stations, do not carry a specific major refiner's brand and instead source fuel from whichever wholesaler is cheapest that day to sell under their own label. As each refiner is sending limited volumes only 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 stations were allowed to buy 10–15 percentage points more than usual, the mood is that if they place orders with refiners even after the maximum price system took effect, supply to stations remains smooth.
By contrast, spot agents are struggling because they cannot secure volumes. When oil prices spike or supply is tight, refiners first cut the volumes sold to spot agents. That is because they must ensure stable supply first to company-operated stations and independent stations under supply contracts.
Selling to their own branded stations is also better in terms of profitability. From a refiner's perspective, selling to spot agents is akin to offloading large volumes cheaply.
As spot agents struggle to secure volumes, not only no-pole stations but also independent stations that received some supply from spot agents are being affected. That is because some independent stations under specific brand contracts were also sourcing from spot agents. According to the Gas Station Association, as of the end of February, no-pole stations (1,449) accounted for 13.9% of the 10,462 stations nationwide.
"Blended sales," or mixing fuels, used to be illegal, but it has been legal since the implementation of the government's "measures to improve the petroleum products market" in 2012. Instead, stations must post a notice stating they are a "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 bring in fuel from spot agents," adding, "We filled our tanks by mixing about 80% refiner volumes and 20% spot agent volumes, but recently spot agents are not accepting orders at all, so we are facing shortages."
With spot agent volumes cut off, placing additional orders with refiners is impossible. That is because refiners are running a quota system based on the volumes stations usually ordered. If a station typically had a large share from spot agents, that portion is now a gap.
Another gas station operator said, "The (refiner's) branch said it would give us as much as we usually buy," adding, "The problem is that the tank is running short by the amount we used to receive cheaply from spot agents, and there is no way to fill it."
The refining industry says a distorted distribution structure—where spot agents sell fuel to branded stations—is the problem. A refiner official said, "Since no-pole and budget stations emerged, the distribution structure for petroleum products has become very complex, and spot agents began selling fuel even to branded stations," adding, "When supply is difficult, our principle is to manage supply with priority to our own branded stations under contract."
Meanwhile, under the "notice on the prohibition of hoarding of petroleum products" implemented by the Ministry of Finance and Economy, refiners must maintain petroleum product shipments in March–April this year at 90% or more of the same months last year. Refusing to sell without justifiable reason or excessively shipping to certain companies is prohibited. Gas stations must not purchase or hold petroleum products excessively for the purpose of profiteering.