GS Caltex and Hyundai OilBank were selected to supply gasoline and diesel fuels for the nation's 1,146 "thrifty gas stations" for the next two years.
The Korea National Oil Corp. and the National Agricultural Cooperative Federation said on July 14 that they picked preferred bidders for Tier 1 Market to supply fuels to independent unbranded gas stations.
Hyundai OilBank, the winner of four consecutive years, will be responsible for the central region (Seoul, Gyeonggi, Gangwon, and Chungcheong) while GS Caltex, the second-time winner since 2012, taking charge of southern provinces (Gyeongsang and Jeolla). Only those oil companies with refinery capacity in domestic locations and nationwide distribution channels are eligible to enter Tier 1 Market biddings.
Tier 1 Market suppliers will provide oil products to thrifty gas stations across the nation. Their annual supply volume is 600 million liters each. The Korea National Oil Corp. decided to double the supply contract length to two years in order to make the supply more stable.
Hyundai OilBank was selected as a preferred bidder for the Tier 2 Market bidder. As for the bidding for gasoline suppliers, it was disqualified as Hanwha Total (formerly Samsung Total) was the sole bidder. For Tier 2 Market suppliers, any operator capable of supplying more than 100,000 barrels of fuels a month can enter.
An industry official said, "Given the price level at which fuels are supplied to thrifty gas stations is too low, little margin is left over and it doesn't help suppliers in their profitability. But it helps them in that they have dependable customers." For example, Hyundai OilBank has brought up its market share to 21.8 percent (as of end of May 2015) from 20.4 percent (as of end of 2011) after supplying oil products to thrifty gas stations for three consecutive years.
