Hyundai Oilbank Catches Up with GS Caltex

Domestic Gasoline Market Share Undergoes Perceptible Shift

[Asia Economy Reporter Oh Hyung-gil] Hyundai Oilbank, long known as the perennial last-place finisher, has caught up with the 'second place' GS Caltex.

The domestic fuel retail market share, which has been firmly maintained under a 'four-company system' for decades, is changing. As the decline of internal combustion engine vehicles due to carbon neutrality leads to changes in the fuel retail business, refiners are also altering their strategies for the fuel retail sector.

According to the Korea National Oil Corporation and others on the 30th, Hyundai Oilbank is expected to surpass GS Caltex and rise to third place in the domestic diesel market for the first time ever this year.

As of the end of the third quarter, Hyundai Oilbank's market share was 23.1%, breaking through the 'magic wall' of 21% for the first time in seven years since 2016 (21.8%). Meanwhile, GS Caltex's share stood at 23.0%, down 0.4 percentage points from the end of the previous year.

SK Energy and S-Oil held first and second place with market shares of 28.8% and 23.6%, respectively. The refining industry expects this sales gap to continue until the end of the year. Following last year's overtaking of GS Caltex by S-Oil, another ranking change is becoming a foregone conclusion.

Hyundai Oilbank's market share reversal has been anticipated since its acquisition of SK Networks gas stations in 2020. Hyundai Oilbank formed a consortium with Koramco Asset Trust and acquired a total of 302 directly operated and leased gas stations owned by SK Networks. The total purchase price amounted to 300.1 billion KRW from Koramco Asset Trust, 965.2 billion KRW from Koramco Energy Plus Trust Management Real Estate Investment Company, and 66.8 billion KRW from Hyundai Oilbank.

As a result, the number of gas stations owned by each refiner changed significantly. As of the end of last year, SK had 3,042 gas stations, Hyundai Oilbank 2,446, GS Caltex 2,273, and S-Oil 2,171. If Hyundai Oilbank increases its owned gas stations through marketing and other efforts, there remains a possibility it could rise to second place.

Fueled by this growth, Hyundai Oilbank has emerged as a key subsidiary since its acquisition by the Hyundai Heavy Industries Group. In the third quarter, Hyundai Oilbank recorded sales of 10.2831 trillion KRW and operating profit of 702.2 billion KRW. Despite declines in refining margins and inventory valuation losses due to falling oil prices, operating profit increased by 305.6% compared to the same period last year, driving the performance of its holding company, HD Hyundai.

However, despite these strong results, Hyundai Oilbank recently withdrew its planned initial public offering (IPO) for this year due to a contraction in investment sentiment in the capital markets and undervaluation of the refining industry. Hyundai Oilbank plans to strengthen its portfolio in eco-friendly businesses such as blue hydrogen and white bio to secure a stable profit structure in the future.

Meanwhile, attention is drawn to GS Caltex, whose domestic market share is declining. GS Caltex is pursuing a business structure transformation by expanding its non-refining businesses. On the 11th, GS Caltex completed a petrochemical facility (MFC) with an investment of 2.7 trillion KRW, declaring its transformation into a 'comprehensive energy company' encompassing refining, petrochemicals, and eco-friendly energy.

An industry insider said, "With the spread of electric vehicles and the emergence of charging businesses, refiners are deeply reconsidering their existing fuel retail businesses," adding, "Market ranking changes in the domestic market will continue according to each company's strategy to efficiently combine fuel retail and charging businesses while maintaining the fuel retail business."