South Korea's four oil refiners charged with price collusion
- Prosecutors allege $17 billion in harm caused by collusion
- Lead prosecutor says collusion has long been pervasive in the industry
- South Korea's president has urged crackdown on collusion, seeks to curb inflation
South Korean prosecutors said on Monday they have charged the country's four oil refiners and four employees at two of the refiners with colluding on fuel prices — anti-competitive actions that they said caused $17 billion in harm.
Though prosecutors did not name the companies, South Korea only has four refiners: HD Hyundai Oilbank, SK Energy, GS Caltex and S-Oil.
Pricing managers at two refiners discussed the scale and timing of price increases shortly after the outbreak of the Iran war this year, the lead prosecutor for the case said at a briefing, without naming the companies.
The other two refiners followed their lead in pricing, he added.
Yonhap News, citing prosecution sources, reported that the two refiners accused of leading the collusion were SK Energy and HD Hyundai Oilbank.
SK Innovation, the parent of SK Energy, declined to comment. HD Hyundai Oilbank and S-Oil had no immediate comment, while GS Caltex did not immediately respond to requests for comment.
Prosecutors allege collusion long pervasive in industry. The Korea Fair Trade Commission this year raised the penalty for collusion to at least 10% of sales related to the violation, up from a minimum of 0.5% previously.
The lead prosecutor said that the refiners pressured local gas station owners with unfair contracts to reflect their colluded prices in consumer prices.
He also said that one of the four employees charged "had exchanged pricing information with employees at rival companies over several years before the war".
"We found the surge in fuel prices following the Iran war was driven by collusion practices that had long been pervasive in the industry," he said, adding that that particular employee had also been arrested.
In addition to the four employees at the two refiners, another four people were also charged but it was not immediately clear where they worked.
In the wake of the Iran war, South Korean President Lee Jae Myung has called for a crackdown on fuel price collusion to curb inflation. South Korea is reliant on imports for its crude oil needs, with 70% of imports originating from the Middle East last year.
Local gas stations have since been raided in investigations to see if there have been unfair increases in fuel prices, with some that kept their prices low designated "good-hearted gas stations."
($1 = 1,527.3600 won)
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