Lower Highway Gas Prices Announced

The price of gas at 136 highway gas stations nationwide, which had been criticized as being too costly, will be lowered to the price of gas at local gas stations.

This means that the price of gas on highway gas stations, which was 1,563 won per liter in June this year, will fall around 23 won to the 1,540 won per liter.

According to the ‘Highway gas station price improvement’ report submitted to People First Party lawmaker Jung Jin-seok by the Korea Highway Corporation, and comments by related industries, the Highway Resting Area Facilities Association (HRAFA), which consists of the Korea Highway Corporation, oil enterprises and highway gas station management enterprises, have recently reached this decision.

Gas prices will be interlocked with the price of gas the Korea National Gas Corporation releases each week. This is the first time highway gas prices are being adjusted to the price of gas on the local market.

Diesel to be lowered even more-

The price of gas on the highway has increased annually compared to gas elsewhere. The related businesses have judged that this has caused drivers to turn away from highway gas stations, and that has become the reason for this decrease.

The gap of gas price per liter in 2004 was 29.12 won, which widened to 35.54 won in 2005, and 40.64 won in the first quarter of 2006 (January-March).

In response to this, those related sectors have given up part of their sale profits, the Korea Highway Corporation will lower the rent at gas stations, and gas enterprises will lower the supply price of gas.

With these changes, filling up the gas tank of a Hyundai Grandeur (75 liters) will take 1,725 won less.

The price of diesel, which has recently been rising, is expected to be lowered even more than that of gasoline. According to June standards, diesel at highway gas stations was 46 won more expensive per liter than local gas stations.

During the first quarter of this year, highway gas stations have earned 6.036 billion won more than local gas stations. If sales of highway gas stations maintain the standards of the first quarter, highway users will be able to save an estimated 24.1 billion won per year.

Resistance from some gas stations-

However, some stations have refused to decrease prices.

In an abnormal distribution system where gas prices differ regionally, however, it is hard to unify prices with local gas stations.

In reality, a gas station in the Jiri Mountain rest area on highway 88 (Daegu direction) sold gas at an average of 1,605 won per liter during June, while a gas station in the Baekyangsa resting area on the Honam highway sold gas at an average 1,549 won per liter, 56 won cheaper. To adjust prices to local gas stations, the Baekyangsa gas station needs only to lower prices by 9 won per liter, while the Jiri gas station must lower prices 65 won per liter.

To cope with this, the related businesses have taken measures so that some gas stations that have been pricing gas expensively due to cost of transport can raise prices 0.3 percent more than local prices. From June standards, this will be 1,544.6 won per liter.

Seung-Heon Lee ddr@donga.com