Slack profits cause more gas stations to disappear

The number of gas stations in Korea dropped for the fourth consecutive year in 2018 amid worsening profitability facing the industry, data showed Monday.

As of end-December, 11,769 petrol stations were operational across the country, down 196 from a year earlier, according to the data by the Korea Petroleum Quality and Distribution Authority.

It marked the fourth consecutive year of annual decline. An annual average of 149 gas stations closed over the past four years. The number stood at 12,345 in July 2014, when the authority started compiling the data. Analysts attributed the downtrend to the industry’s deteriorating profitability that stems from the country’s high oil tax and increased costs.

“Oil taxes account for nearly half the gasoline cost, which makes gas stations unable to respond actively to changes in global crude prices,” an industry source said. “In addition, credit card fees have become a big burden.”

Oil taxes - including the transportation-energy-environment tax and the import surcharge, take up nearly 60 percent of the gasoline price.

Also cited were a hike in the country’s minimum wage, competition from discount gas stations, improved fuel efficiency of new vehicles and falling demand for gasoline.

Yonhap