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Hyundai Oilbank opened its latest self-service station last week in southern Seoul, by remodeling a full-service station.
It plans to build about 20 more similar ones this year, adding to its
28 self-service stations already in operation. Previously to this year,
there were only 13 service stations that had self-fueling.
"Self-service filling stations can save labour and management costs, and
benefit customers with reduced fuel charges," a spokesman of the
refiner said.
GS Caltex also said it will ride on the trend even further with the aim
of expanding the number to 200 this year. The company, which started
the business in 2005, currently runs the most self-service fuel
dispensers in South Korea with 142.
Only 2 percent of local service stations are currently operated this
way, while the proportion surpasses 80 percent in the United States.
However, industry forecasts the number will continue to grow with
better profitability. Switching to self-service can generally create 20
to 30 percent more sales, industry watchers say, adding that it is
mainly attributable to the price edge.
Hyundai Oilbank's self-service stations sell fuel 40 to 100 won (3 to 9
cents) cheaper per litre than at their other stations. The growing
number of self-service stations backs the analysis. While there were
150 nationwide in 2008, the number has nearly doubled to 280 now.
Self-service service stations were first introduced in South Korea in
the mid-1990s as refineries braced for the liberalization of oil
exports and imports. At that time, however, they didn't appeal to local
motorists unfamiliar with such a system. With the turn of the decade,
however, oil firms have focused more on them as prices started to surge.
They also helped other businesses make inroads into the industry. Since
2008 when E-mart became the first major retail company to switch to
operating service stations, others have joined in and adopted the
self-service system. Last month, a provincial branch of Nonghyup, the
nation's agricultural group of cooperatives, also opened one with its
own brand of "NH-Oil."
Individual service station owners are worried that the trend could
further erode their business as overall costs are prohibitive for
individual operators to switch to self-service. "A self-fueling
machine costs up to 30 million won. This means most self-serve gas
pumps will be built by major business owners," an official of the Korea
Oil Station Association said.
PetrolWorld 010310 Source :
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