As Middle East tensions recently pushed up domestic fuel prices, the Korea National Oil Corporation (KNOC) began tightening oversight starting with "budget gas stations." The warning came after cases emerged of excessive gasoline and diesel price hikes not only at ordinary stations but also at budget stations, urging them to refrain from sharp fuel price increases.
On the 6th, according to the Korea National Oil Corporation (KNOC), the corporation sent a text message the previous day to budget gas stations nationwide titled "Request to refrain from excessive increases in retail prices."
Through the text, the corporation said, "Recently, some budget gas stations have been found to be raising retail prices excessively," adding, "For stations that do not support national policy—such as those showing a markedly high price increase since Feb. 28 (when U.S. and Israeli strikes on Iran began) or those taking excessive margins—we plan to implement necessary management measures including additional surcharges, evaluation demerits, and nonrenewal of contracts."
It added, "In particular, please ensure there are no cases of raising prices excessively relative to purchase costs for recently procured volumes on the grounds of an expected future price rise," and "We ask for your cooperation so that budget gas stations can align with their purpose of stabilizing domestic oil prices."
The KNOC's warning that it will not renew contracts if budget station operators raise fuel prices excessively effectively means stripping them of their business rights.
The warning came because some budget stations, like ordinary stations, have been sharply increasing fuel prices. As of the day, one budget station in Seoul was found to be selling regular gasoline at 1,899 won per liter, higher than the national average.
Budget gas stations are a policy introduced by the government in 2011 to break the oligopolistic structure centered on existing refiners and encourage market competition. By receiving fuel at prices lower than market rates, they maintain relatively low retail prices and serve to curb price increases at nearby stations.
As of the end of last year, there were 1,318 budget gas stations nationwide. They account for 12.3% of all stations.