Interview with the President of South Korea’s petrol station association

In his first year as President, industry veteran Ki Yun Yoo has tried to unite the industry, improve communications with the Government and tackle COVID-19.

What were some of your goals when taking the role of President of KOSA?

One of the main goals is improving relations with government departments. Before I took office, communication with the Government was close to breaking point. There was no platform to discuss some of the challenges facing the gas station industry. With this in mind, we tried to restore relations with various ministries including Trade, Industry and Energy. In February, we also had a conversation with the Minister of Environment, Myung-rae Cho, to urgently expand the installation of vapour recovery systems in South Korea. In addition, a new external cooperation committee was formed within the association. We will continue to make great efforts to strengthen the cooperation with government bodies.

A clear target was the reduction of conflict and improving unity among the industry. Has anything improved since you took office?

In my acceptance speech, I made an emphasis on communication and harmony. We created a communication committee immediately after taking office. The committee was formed to promote unity between industry and associations by opening up a dialogue with associations, member companies, the central assembly and each city council. We can say that internal conflict in the association has significantly reduced.

How did you improve cooperation between the association and member companies?

So far, I think the association hasn't met the expectations of members. This has caused a concerning gap between the two. To tackle that we decided that first we had to put an end to internal conflicts of the association. So immediately after inauguration, I asked each member to support us and the role we play. Another way to improve the situation was to provide more value as a legal actor – improving government relations and playing an active role.

What are some of the biggest challenges currently facing the industry?

The impact of COVID-19 is the greatest challenge. Due to the spread of the virus, traffic volume and demand for petroleum products have taken a huge toll on sales. The gas station market is still in a poor business environment. If the situation is prolonged, the risk of the fuel retailing industry going bankrupt increases. Many operators complain that their sales have shrunk from 30% to as much as 50% compared to 2019.

What measures are being taken to tackle COVID-19?

First of all, the most important thing is to minimize the damage. We launched a survey among our members to find out their needs in this crisis. We plan to collect the opinions of member companies and discuss them with the Government. Some of the initiatives include financing loans, fuel tax credit card fee reduction, gas station road occupancy reduction, expansion of credit card deductions for individual businesses, special support for quarantine and employee disinfectants, and the formation of a council. Specially for the safety of gas station employees, support for quarantine and personal disinfectant is urgent.

When looking at the industry as a whole, what other issues are you looking to improve?

A key element is the Government's artificial fuel price reduction policy. We would like the Government to avoid participating in the market and enable fair competition between retailers. We also demand that it carries out the role of market watcher and coordinator. Policies need to consider the protection of the industry rather than inducing price competition indiscriminately.

The impact of the fierce price war has led to a delicate situation. Instead of neglecting indiscriminate competition between retailers, we need to encourage fair competition. In some cases, small sites cannot afford to shut down as the costs of closing operations is too high. Authorities need to give retailers an exit strategy. The role of the association is very important for this.

This interview was first published by Oil&Gas on March 19.