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GS Caltex and Hyundai Oilbank to supply South Korea’s discount gas stations

South Korea’s Ministry of Knowledge Economy announced that the government had designated GS Caltex and Hyundai Oilbank to supply gasoline at 40 won (US$0.036) per liter below the market price, to newly established alttuel or discount gas stations. The two companies will supply gasoline to the discount gas stations for one year. The government has been urging local refiners to lower their costs in order to help alleviate the effects of inflation on the general public. The National Agricultural Cooperative Federation or Nonghyup, is the main body that oversees the ministry’s latest gas station program. Nonghyup and Korea National Oil Corporation will purchase large amounts of gasoline from the two refiners and deliver them to the discount gas stations, who will in turn sell the gas for 60 won (US$0.05), 100 won (US$0.8) cheaper per liter than gas sold in other stations. The ministry says it will set up 700 discount stations in 2012 and by 2013, it expects to have 1,300 stations nationwide. ‘We have a survey proving that competition between a regular gas pump and an alttuel station will cut retail gas prices by about 30 percent in one month,” an official in the ministry said. The oil industry has expressed concern about the government program. (December 22, 2011)