| 摘要 | ABSTRACT
1. The necessity and purpose
Both of Korea and Japan have a common characteristic, which they are highly dependent on foreign nations in terms of crude oil because it is not be produced within the countries and the development activities of oil remain relatively low compared to other developed nations. Due to those market limitations, the two countries�� policies on oil industry are similar each other and the resulting distribution structure in the downstream tends to be somewhat alike. Of course, given the prime seller, or a distributor which is charge of sale and distribution, has a significant market share in Japan, its situation is a little different from that of Korea where the oil company, or the producer, has a significant market share. However, both nations have recognized a stable supply of oil as the top priority task in the policy and industry and at the same time performed the market liberalization to secure the international competitiveness in oil industry. And due to those policy similarities, the market types are more relatively similar compared to other developed nations.
It��s felt that the two nations which showed the similar market structure and policy direction until recently have stepped toward slightly different directions since the mid 2000s. First, because the demand for oil products in Japan started to diminish sharply owing to domestic and foreign factors, including responding to climate change, high oil prices, declining population and so on, the profitability has gotten greatly lower in the most oil-related companies; i.e., the distribution agencies such as gas station, including the prime sale company. Therefore, worrying highly about the weakened international competitiveness, the government makes efforts to make those companies secure the profitability.
On the other hand, the policy in Korea which faces to the shocks originated from foreign nations such as responding to climate change and high oil prices like Japan shows even contrarily attitudes. Especially, the consumers in Korea reveal their dissatisfaction with regard to the increased oil prices towards the government, oil companies or gas stations. Reflecting the attitudes, the government also gives the priority to the promotion of the price competition in oil market and the expansion of market transparency.
This study analyzed the pricing structure at the stage of wholesale and retail in order to review the reasons why the recent policies in the both nations are decided contrarily to each other and to seek a measure to promote the market price competition which the Korea government now targets on. Above all, through using a vector auto-regression model, it analyzed the relation among Dubai oil price, Singapore spot price and the Korea��s wholesale price, and among those prices and the Japan��s price, in terms of the wholesale price which is highly influenced by the international price. It analyzed on a shock reaction function, the Granger causality test, and the dispersion and disintegration in order to complexly consider various factors. It analyzed the factors which have an effect on the price decision of gasoline and diesel through using an attribute-value method in order to review the price decision at a retail step which is important in the relation with surrounding competitive gas stations under the local competitions.
2. Key contents
According to the analysis on the wholesale price-deciding structure, it was analyzed that the wholesale price in Korea is not so high compared to Japan. In Korea, the tariff and import charges are imposed and the petrol tax is relatively high weighted compared to Japan, but the real wholesale price is not high compared to Japan. In addition, maybe thanks to the properties of Korea��s domestic market that oil is produced only by 4 oil companies, it��s judged that the production efficiency is also higher compared to Japan where a number of prime sale companies do business. Considering the factors that have an effect on the wholesale price, Korea is influenced by the international price such as the spot price in Dubai and Singapore while Japan is relatively more influenced by its domestic market. Especially, it was found that the spot price in Singapore has a significantly big effect on the Korea��s domestic market in the short run. Given the product-specific influence in Korea, the price of gasoline is more influenced by the Singapore market compared to diesel. Japan��s market is supposed to be most influenced by its domestic supply and demand in the short run and by the Dubai oil in the long run. In addition, it was found that the influence in the domestic market lasts longer in Japan compared to Korea.
The above estimation coincides with a method to decide the wholesale price which is known by the oil companies in Korea and the prime sale companies in Japan. The oil companies in Korea whose domestic spot market has not founded clearly decide the wholesale prices based on Singapore, so it��s seen that they compete with the potential importers and arrange the amount of export and domestic demand.
In this wholesale stage-deciding method, because the profit of oil companies can be maintained at a similar level in comparison with the common foreign companies which do business in the international market, it��s thought that the method is also advantageous to the profit structure of oil companies. On the other hand, it's found that the wholesale price decision in Japan is significantly high weighted by its own supply and demand compared to Korea. The prime sale companies in Japan have since decided the price mostly according to the domestic supply and demand, but as the Japan��s domestic demand decreases drastically, the earnings of Japan��s prime sale companies are also supposed to get lower significantly. As the earnings decrease drastically as such, recently the prime sale companies in Japan not only carry out the economy of scale, but also change the pricing criteria to the price of Tokyo Exchange or Singapore's spot price like Korea.
The pricing at the retail stage is found to be quite a similar between the both nations. Of course, because the land price in Japan is higher than Korea, the cost or margin in the distribution sector is found to be higher in Japan, but the other pricing factors are found to be similar to Korea. It��s found that the gas stations without the trademark of the existing oil company, for example the private label stations, maintain the lower price compared to the existing ones and the self-gas stations also do that compared to common ones while the price of gasoline and diesel at the gas stations providing various services is higher than the other stations. This study didn��t try to analyze the pricing method in Japan��s gas stations because of the limited data, but it is significantly meaningful in policy that, with regard to Korea��s gas stations, the more the surrounding competitive gas stations and in case there is a private label gas station within 1km-radius centering on the existing one, the lower the price of gasoline and diesel.
3. Implications
Considering only the aspect for promoting the price competition based on the estimation, it��s thought that Korea should pursue the direction of the current Japan��s market. First, at the wholesale stage, it��s seen that Japan��s market reflects more the supply and demand in its domestic market than the international price according to the intense price competition among a number of suppliers and the earnings of prime sale companies also decrease greatly due to the drastic reduction of domestic demand. Especially, in the policy aspect to promote the price competition, the Japan��s pricing criteria decided at the Tokyo Market reflecting the supply and demand of Japan's market is also significantly meaningful to the Korea��s wholesale market. If the price decided at the Korea's real wholesale market rather than based on the Singapore market which has nothing to do with Korea��s supply and demand would be the indicator for the pricing of oil companies, because the price decided by the domestic supply and demand is decided clearly beyond the consumers�� suspicion, it can promote the competition among oil companies. However, sufficient suppliers should be secured for founding the above-mentioned market: in Korea's situation without sufficient suppliers the vertical systematization of distribution structure should be changed at least to the competitive structure for pricing among oil companies. Given the realities that the purchase of total amount between the gas station with the oil company��s trademarks and the oil company is generalized and the private label stations have a weak market share, it��s hard to realize a change of direction. Therefore, it��s thought that it��s needed to establish in advance the structural improvement at the retail stage for activating the domestic spot market.
However, if the governmental policy would target on the competitiveness reinforcement among domestic oil companies rather than on the price competition, the above-mentioned structural change in terms of wholesale pricing might weaken even the international competitiveness of domestic oil companies. In the current pricing of the domestic oil companies based on the international price, the domestic oil companies follow similarly the tendency of earnings among international producers. However, if the pricing would be changed to the pricing reflecting more the domestic supply and demand, the activities of domestic oil companies are supposed to be decided more in the domestic market rather than in the foreign. Of course, it's highly possible that various gaps would be shown at a sector to arrange the export amount and the supply and demand amount due to the characteristics of Korea��s market with lot of surplus production. For example, if the domestic price would get lower due to the lowered domestic demand level and then the produced amount of domestic oil companies would largely fall on the foreign nations under high price, the stability regarding supply in the domestic market might be greatly damaged. Of course, in the long-term aspect, if the domestic supply would be diminished, the domestic supply and demand might go tight naturally and then the price in the domestic market follow the foreign market. In the short-term aspect, however, when the supply and demand in the domestic and foreign market cannot be moved naturally and smoothly, we shouldn��t overlook the possibility that a big problem may occur in the supply stability in the domestic market.
According the result to compare the pricing structure at the retail stage, Korea is found to be similar to Japan. Then, to compare the oil markets of Korea and Japan, it��s needed to note the fact that the self-gas stations and the private label ones with high price-lowering capability have a slight market share in Korea. Considering the fact that all the self-gas stations and the private label ones in the both nations maintain a low-price level but Japan shows a higher distribution rate, it can be said that the retail market in Japan has more factors to promote the price competition than in Korea.
Because now the profitability of Japan��s gas stations gets too low because of excessive price competition and then the number of gas stations is reduced drastically, the government gives the policy priority to the stable oil supply with maintaining the network. Therefore the government struggles to create the various kinds of added-value to increase the profitability of gas stations and the various secondary measures for closed gas stations.
On the other hand, the number of domestic gas stations is still under the tendency to increase. The cost-saving gas stations like self-gas stations and the private label ones are not as common as Japan. In other words, although the owners of gas stations say that the profitability gets significantly poor, the situation is seen to still be relatively better compared to the Japan��s gas station business. However, if the government policies focus to the price competition at the retail market like the recent, Korea will also have something to worry similarly like the Japan government soon. Therefore, it��s recommended that while seeking the plans to expand the added-value of gas stations to the oil-extra businesses at the same time rather than only a plan to unconditionally promote the price competition, the government makes the network of gas stations contribute to the development of domestic oil industry and lower the price at the same time.
11_20_Pricing Factors(Hyung-Gun Kim).pdf |
