Costco gas station seen unlikely to threaten competition

A gas station that will be built in Taoyuan by the American warehouse club Costco Wholesale Corp. is unlikely to have any significant effect on other fuel suppliers in the domestic market, two local companies said Friday.

Lin Jung-lieh (???), head of state-owned CPC Corp., Taiwan's (??) oil product marketing division, noted that Costco said in its announcement Thursday that the new gas station will be built in Taoyuan's Zhongli District to provide service only to Costco members.

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

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

In similar vein, Formosa Petrochemical Corp. (????), a privately owned fuel supplier, said Costco's lone gas station would pose little or no threat to the fuel sale business in the Zhongli area.

In its announcement Thursday, Costco said the gas station will be opened next year in Zhongli District to serve its members, offering the best fuel prices in Taiwan.

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

Costco Taiwan Vice President Wang Yu-mei (???) told reporters Thursday that the Zhongli gas station will be self-service but Costco employees will be on hand if customers need assistance.

She said Costco is expected to adopt a floating price mechanism similar to CPC and Formosa Petrochemical's but has not yet 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 Petrochemical said it had been discussing the issue with Costco but a final decision had not yet 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 Zhongli warehouse and construction is expected to begin soon, according to local media reports.

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

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

Source: Focus Taiwan News Channel