.

.

.

This paper examines the market impact of a government-led intervention in South Korea’s retail fuel industry: the introduction of “thrifty” gas stations. These stations were supplied with fuel at reduced wholesale costs, thereby entering local markets with a cost advantage over incumbent stations. Drawing on a panel dataset covering approximately 22,000 gasoline stations from 2010 to 2019, we estimate the effects of this policy on fuel prices, market structure, and service quality. Using fixed effects and two-stage least squares (2SLS) models, we find that the entry of thrifty stations significantly lowered average retail gasoline prices through both direct cost-based pricing and intensified local competition. However, these short-run gains diminished over time as high-cost stations exited the market, leading to increased market concentration and weakened price competition. In addition, we document a shift toward self-service formats in treated markets, suggesting that service quality declined as firms adjusted to cost pressures. Taken together, the results indicate that while the policy effectively reduced prices in the short run, its long-run efficacy was undermined by structural and behavioral market adjustments, raising concerns about the dynamic consequences of asymmetric-cost competition under government intervention.

This study empirically compares and analyzes the cost efficiency of two LNG import methods—private direct import and the Korea Gas Corporation’s average rate system—in terms of fuel cost under buyer and seller market conditions in the global LNG market. Using Asian LNG spot prices (JKM) from January 2015 to May 2023, the Bai-Perron test was applied to identify changes in market structure. Contrary to the perception that direct importers would hold a cost advantage in buyer markets and KOGAS-supplied generators in seller markets, the empirical analysis revealed that direct importers are relatively advantageous in both market types, with their competitiveness being particularly pronounced in seller markets. This study reexamines the impact of the high market responsiveness and cost efficiency of private direct importers on electricity system.

.