S-Oil Corp., Korea’s third-largest oil refiner, said Tuesday that it will cut the supply prices of its gasoline and diesel by 100 won ($0.9) per liter starting Thursday, following market leader SK Innovation’s suit.
The firm’s directly managed stations nationwide will thus reduce its retail fuel prices by the amount, it said. The price reduction will last for three months.
“We made the decision in order to relieve consumers of fuel cost burden amid high fuel prices and to actively cooperate with the government’s effort to contain commodity prices,” an S-Oil official said.
Industry watchers said SK Innovation’s decision to lower retail fuel prices on Sunday has prompted its smaller rivals to consider similar measures.
Yet S-Oil, unlike SK Innovation, offers an immediate on-site discount for its customers instead of refunds through credit card payments, which would be more convenient for them, the firm said.
GS Caltex Corp., the country’s second-largest refiner, meanwhile, also said Tuesday that it is mulling cutting the price of its oil products from April 20.
The planned price cuts would cost SK Innovation an estimated 245 billion won, GS Caltex Co 195 billion won and S-Oil Corp. 84 billion won, according to KB Investment & Securities Co. The amounts account for 8, 6 and 3 percent of those firms’ prospective earnings for this year.
However, the price reduction will cause only short-term losses for the firms in the second quarter with its impact both on their balance sheets and on overall oil prices, analysts said.
By Koh Young-aah (email@example.com