Sat, Sep 24, 2016 - Page 12 News List

Fuel suppliers unfazed by Costco’s plan

MARKET:CPC said Costco’s lone gas station will only service club members and poses little threat to its outlets, which offer vehicle maintenance, car wash and other services

Staff writer, with CNA

Costco Wholesale Corp’s plans to build a gas station in Taoyuan is unlikely to have any significant effect on other fuel suppliers in the local market, two Taiwanese companies said yesterday.

Lin Jung-lieh (林榮烈), the head of state-owned CPC Corp, Taiwan’s (CPC, 台灣中油) oil product marketing division, said that the US warehouse club’s announcement on Thursday said the new gas station in Taoyuan’s Jhongli District (中壢) would provide service only to Costco members.

Such a model is not likely to have much of an effect on the business of its state-run gas stations in Jhongli, Lin said.

In addition to selling fuel, CPC’s gas stations across the nation provide services such as vehicle maintenance, car wash and convenience store sales, which gives CPC an advantage over its newest competitor, he said.

Formosa Petrochemical Corp (台塑石化), a privately owned fuel supplier, said Costco’s lone gas station would pose little or no threat to its business in the area.

Costco said the gas station is to open next year to serve its members, offering the best fuel prices in the nation.

Taiwan is the second Asian market — after Japan — in which Costco is opening a gas station.

Costco Taiwan vice president Wang Yu-mei (王友玫) told reporters on Thursday that the Jhongli gas station would be self-service, but Costco employees would be on hand if customers need assistance.

Wang said Costco is expected to adopt a floating price mechanism similar to CPC and Formosa’s, but has not decided if it will adjust prices weekly like they do, or even daily.

While Wang declined to disclose the source of Costco’s fuel supply, Formosa said it had been discussing the issue with Costco, but a final decision had not been reached.

According to market sources, Costco has also been in similar talks with CPC.

The Taoyuan City Government in March issued a permit to Costco to build a gas station at its Jhongli warehouse and construction is expected to begin soon, local media reports said.

Costco is considering opening gas stations at its other warehouses in Taiwan to expand its services to members, the reports said.

Costco has 12 warehouses in Taiwan and a domestic membership of 2.6 million.

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