Korea’s first electronic oil spot market will open at 10 a.m. on Friday, the Korea Exchange said.

The bourse operator said the market would help make distribution more transparent and stabilize petroleum prices in the domestic market.

Major oil brands such as SK, GS, HD and S-Oil will be listed on the new market, based on gas stations across the nation. Trading hours are set from 10 a.m. until 4 p.m., and a single unit for a trade order is 20,000 liters.

Market participants are oil companies, oil importers and exporters, franchise outlets and gas stations. Oil refiners, importers and exporters will be allowed to only sell oil products while gas stations can only make buy orders. Franchise outlets in the distribution channels could place both orders.

The KRX will collect deposits and handle the transitions for the marketplace. Any participant should pay the KRX 1.5 million won ($1,300) as an initial deposit.

The electronic market is expected to stabilize oil prices at a time when the Korean economy is trying to minimize the impact from a hike in international crude oil prices.

As Korea relies on foreign imports for all of its oil needs, manufacturers and exporters are trying to defend their products against steep price swings of imported oil.

Consumers are also set to benefit from the new oil marketplace, government officials earlier said.

To promote the spot oil market and encourage transactions, sellers on the marketplace would be given a tax incentive of up to 0.3 percent.

The U.S. and other advanced countries adopt a combination of factors in setting prices for oil to keep volatility at a minimum, and Korea’s oil marketplace is regarded as a first step toward similar efforts.

By Yang Sung-jin (insight@heraldcorp.com)