The Spatial Patterns of Distribution by Petroleum Products in Korea

Abstract

The production of petroleum products has been began in 1964 by Yukong and Kukdong Oil Refinery Co. Ltd. in Ulsan and Pusan respectively. And after 1964 Honam Oil, Kyungin Energy Co. and Ssangyong Oil Refinery Co. Ltd. had been built. So the productions of petroleum products have been increased by 41.5 times in 1984 than in 1964 (4, 843, 000 Bbl.). The petroleum industry in Korea has developed the only downstream and resulted in the oligopoly of five oil makers, and each maker sells oil with its own organization of distribution network.The purpose of this paper is to clarify the interregional distribution and to analyse the spatial patterns of the petroleum products and the mechanisms of the distribution stages and the oil makers. The makers for this analysis are Yukong Co. Ltd., Konam Oil, Kyungin Energy, Ssangyong Oil and Kukdong Oil. Each maker's refinery is located in Ulsan, Yocheon, Incheon, Onsan, and Pusan. Data for this study are the volumes of consumption of the petroleum products which were conducted by the Korea Petroleum Development Corporation and the sale by the agencies of the Association of Distribution of Petroleum Products in 1985.The results are as follows:1. The physical distribution of petroleum products differs by each kind of petroleum products, that is, the heavy oil over three quarters is sold by the direct transportation from the refinery to the large consumers, but gasoline and kerosene are sold by the agency transportation. And the volumes of direct transportation and sale by the agencies of light oil consist of 30% and 70%. By the agencies gasoline is mainly sold to the gasoline stations, kerosene to the gasoline stations and the oil stores. 44.5% of the light oil are sold to the gasoline stations.2. The numbers of the oil tank districts were thirty in 1984. Of these oil tank districts, fourteen oil tank districts are located on seaboard, and they sell large volumes of oil. Because the refineries are usually located on seaboard and the crude oil is imported from the foreign countries by the oil vessel. The characteristic features taking share of volumes in each oil tank district are as follows: the thirteen districts predominantly seem to take volumes from Ulsan, and their spatial distribution is nation-wide. And the eight districts from Ulsan and Yocheon distribute to the southwestern part. Important petroleum products dealing in each oil tank district are as follows: Pusan, Taegu, Incheon, Taejeon, Kwangju, Yocheon and Masan deal with the light and heavy oil; Suwon, Tonghae, Kunsan, Pohang, Ulsan and Onsan the heavy oil; Seoul the light oil and kerosene; and Wonju the light oil.3. For the heavy oil, the direct sale regions by makers are as follows: in case of A heavy oil, sale regions by the Yukong are nation-wide, while four makers except the Yukong are local. In case of the B heavy oil, sale regions by five makers are local. The A and B heavy oil are dominantly sold in Seoul and Pusan, the reason of which is the concentration of iron and steel industry in Seoul and Pusan, and the demand of fishing boat and iron and steel industry in the S. Kyungsang. In case of the C heavy oil, sale region by four makers except the Kukdong is nationwide, and the thermal power stations are mostly located on the sale region of the C heavy oil.4. Gasoline, kerosene, and light oil are sold by agency. Sale regions of the Yukong and the Honam are nation-wide, while the Kyungin, the Ssangyong, and the Kukdong except two makers are local. The spatial largeness or narrowness of sale of these petroleum products caused by sale volume of makers.5. In sale regions by agency in N. and S. Chungchong, the spatial patterns of sales by the gasoline station are resulted from the physiographical factor, the transportation factor, and the distances between demand region and agency. And the difference of sale region by each kind of petroleum products is decided under according to the difference of the sale