Bidding for Thrifty Gas Station Fuel Suppliers Begins

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Monday, July 6th, 2015
Thrifty Gas Station

A bidding to select suppliers of gasoline and diesel fuels for the nation's 1,100 "thrifty gas stations" has officially begun.

As the contract term will be lengthened to two years from current one year, it is likely the competition to get licenses will be fiercer this time. In addition, it remains to be seen whether Hanwha Group will be selected as a supplier after 16 years of hiatus in the retail petroleum business if Hanwha Total, formerly Samsung Total, gets the license.

The Korea National Oil Corp. and the National Agricultural Cooperative Federation announced on July 3 that they would begin a selection process for thrifty gas station fuel suppliers after putting out a bidding notice on the same day. The bidding will be held on the 14th and the successful bidders will start supplying fuels to independent unbranded gas stations from September this year to August 2017.

The state-run Korea National Oil Corp. will pick a total of three oprators, including two in Tier 1 Market and one in Tier 2 Market. In Tier 1 Market only those oil companies with refinery capacity in domestic locations and nationwide distribution channels are eligible to enter. In this category, only four companies, including SK Energy, GS Caltex, S-Oil, and Hyundai OilBank, are included. Meanwhile, in Tier 2 Market those operators capable of supplying more than 100,000 barrels of fuels a month can enter.

In previous biddings, Hyundai OilBank has been selected as the final bidder for three consecutive times in Tier 1 Market while SK Energy, GS Caltex, and S-Oil were selected once. In Tier 2 Market, Samsung Total has consistently been the winner and it will bid for a fourth time under the changed name of Hanwha Total.

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