1st Gas Station at Discount Store Chain Opened

Discount store chain E-Mart opened its first gas station yesterday with help from supplier SK Networks.

The government in March allowed discount chains to operate gas stations to cut the prices of petrochemical products.

Park Jeong-suk, the first customer at E-Mart’s first gas station, said, “Since I run heavy equipment, I need to frequently fill up. This gas station provides oil at relatively lower prices. I will be a regular patron.”

The main question was just how cheap large discount stores would sell gas.

After checking oil prices at nine gas stations near the store, E-Mart set the prices of both regular gas and diesel at 1,198 won (0.91 U.S. dollar) per liter, 100-131 won lower than the prices at nearby gas stations (1,298 – 1,329 won or 0.99 – 1.01 dollars).

E-Mart’s gas station could cut labor costs since it is self serve.

Despite cold weather, customers were willing to get out of their cars to pump gas. Most of them finished fueling in five minutes.

For the day, Kim Jin-sang, who drove a Hyundai Grandeur luxury sedan, bought 53 liters of gasoline for 64,000 won (48.70 dollars). “I came from a distance since this gas station sells gas at lower prices. The weather is really cold, but I’m still willing to fill it up myself due to the price competitiveness.”

For 40 minutes from 10 a.m. yesterday, 41 customers visited the gas station. As of 6 p.m., 300 vehicles filled up with 11,250 liters of gas at the station.

E-Mart CEO Lee Gyeong-sang said, “To open a new gas station, we had to get countless approvals from relevant authorities and must compete with other gas stations. But we are running the gas station to serve our customers better. Generating profit is not our ultimate goal.”

E-Mart will open this month its second gas station next to its store in Tongyeong, South Gyeongsang Province, and five or six more in regions such as including Gunsan and Suncheon in the Jeolla provinces next year.

Lotte Mart is negotiating with S-Oil over opening gas stations by its stores.

Home Plus and GS Caltex will open one or two gas stations in regions including Pyeongtaek, Gyeonggi Province, in the second half of next year.

wiseweb@donga.com