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Gas Discounts Are Less Than We Think

Posted September. 28, 2006 03:26,   


Mr. Choi, aged 34, bought 40,000 won worth of gas, or 26.68 L, at a gas station whose price was 1499 won per liter in July. He paid with a credit card that offered discount of 40 won per L, and later received a credit card bill that specified he got a 1,044 won discount that day.

He did not calculate if that amount was correct. But, if he were to get 40 won off each liter, then the deducted amount should have been 1,067 won, not 1,044. He lost 23 won without knowing it. Why did the miscalculation occur in the first place? The card company calculated the discount rate based on standard price reported to the company by the gas station, not on the actual selling price. The standard price was 1,532 won per L. Therefore, according to the credit card company’s calculation, Mr. Choi bought 26.11 L of gas, not 26.68 L, and got 1,044 won off.

If the standard price had been lower than selling price, Mr. Choi could have got more deducted, but such things rarely happen.

According to Korea National Oil Corporation (KNOC), last year’s average oil price at pump was 1,432.25 won per liter, but the standard price was 17 won higher, standing at 1,449.25 won per liter.

With the exception of SK Corporation, the standard price was higher than the pump price at other refinery chains including GS Caltex, Hyundai Oilbank, and S-oil.

According to KNOC, the selling price of GS Caltex was 1,435.66 won/L while the standard price was 1,466 won/L. Hyundai Oilbank and S-Oil had average selling price of 1,422.89 won and 1,425.62 won, and their average standard price was 1,460 won/L and 1,442 won/L, respectively.

Neither the oil refineries nor the gas stations are disclosing the standard price, not to mention the card companies, which notify on their websites that the discount will be based on “standard price.”

“Card companies and gas stations are fooling the customers by advertising as if they offer more discounts than they actually do,” said GNP Lawmaker Chin Soo-hee on September 26.

“We are notifying the standard price to card companies based on monthly average price, because it is difficult for them to determine exactly how many liters have been purchased by their customers. We are not disclosing the price because it could affect the prices at some pumps,” explained a worker at an oil refining company.

swon@donga.com havefun@donga.com