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By Lee Hyo-sik
SK Innovation, Korea's largest refiner, has expanded its market share here over the past year as it signed a series of gasoline and diesel supply contracts with Korea Expressway Corp.
But Hyundai Oilbank continues to lose market share to its rivals in line with its struggling parent company, Hyundai Heavy Industries (HHI), which has been coping with a prolonged shipbuilding industry slump.
According to refiners Wednesday, SK's market share rose to 34.08 percent in September from 31.59 percent three months earlier as it began supplying gasoline and diesel in the third quarter to Korea Expressway's gas stations in the Jeolla and Gyeongsang provinces.
GS Caltex, the nation's second-largest refiner, also saw its share rise to 26.24 percent from 25.2 percent during the same three-month period.
The market share of S-Oil, controlled by Saudi Aramco, inched up to 20.98 percent in September from 20.14 percent in July, becoming the third-largest refiner.
S-Oil has been the most aggressive toward expanding its market share by launching a series of TV commercials and holding a wide range of marketing activities to woo more motorists. Its market share exceeded 20 percent for the first time this year, up from 19.75 percent in 2016 and 18.3 percent in 2014.
"S-Oil is expected to further bolster its presence in the domestic gasoline and diesel market as it completes a 4.8 trillion won project next June to build residue enhancement and olefin production facilities in the southeastern city of Ulsan," an industry official said.
"The new facilities will enable the refiner to offer premium fuel at lower prices by converting bunker C oil and other heavy fuel oils into gasoline and other high-value products in a more cost-effective manner," he said.
In contrast, Hyundai Oilbank has seen its presence shrink over the past year. In particular, its market share dropped sharply to 17.34 percent in the third as it stopped running its largest refining plant in Ulsan for 33 days for a regularly-scheduled maintenance. The plant accounts for about 52 percent of the firm's production.
Its market share has been on decline over the past few years as its parent firm HHI has been grappling with falling shipbuilding orders.
"It would be difficult for Hyundai Oilbank to aggressively expand its business when HHI is undergoing drastic downsizing," the official said. "The refiner will likely remain on the sidelines until the shipbuilder gets back on track."
The number of Hyundai Oilbank-affiliated gas stations dropped to 2,210 in September from 2,345 in December 2012, while that of S-Oil rose to 2,102 from 1,942.
