South Korean prosecutors have charged four major oil refining companies for breaking fair trade laws. They say the companies worked together to increase fuel prices in the country after the Middle East conflict. The companies named are HD Hyundai Oilbank, SK Energy, GS Caltex, and S-Oil, according to Yonhap News Agency.
Large-scale collusion in oil sales
Prosecutors said HD Hyundai Oilbank and SK Energy worked together on oil sales worth 14.2 trillion won (about $9.2 billion). When including GS Caltex and S-Oil, which are accused of following the same pricing, the total impact of the alleged anti-competitive activity is around 26 trillion won.
The investigation began after fuel prices in South Korea rose sharply following the US–Iran conflict. Prosecutors believe the main reason was coordination between pricing executives at two of the companies on when and how much to raise prices.
Collusion described as long-term practice
Prosecutors said this was not a one-time incident but part of a long-standing and widespread practice in the industry. They said the issue became more visible during the global crisis.
In March, South Korean President Lee Jae Myung warned on X that oil refiners and corporations engaged in price-fixing would be held accountable. He also said the government would use all legal measures against unfair business practices.
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.
Stronger penalties and investigation
The Korea Fair Trade Commission has increased penalties for collusion this year. Companies can now be fined at least 10% of the sales linked to violations, compared to a minimum of 0.5% earlier. The lead prosecutor said that the refiners pressured local gas station owners with unfair contracts to reflect their colluded prices in consumer prices.
“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 told Reuters, adding that that particular employee had also been arrested.
More people charged in the case
Apart from four employees at two of the refiners, another four people have also been charged. However, it is not yet clear which companies they are linked to. After the Iran war, President Lee Jae Myung called for strict action against fuel price fixing to control inflation.
South Korea depends heavily on imported crude oil, with about 70% coming from the Middle East last year. Authorities have also carried out raids on local gas stations to check for unfair price increases. Some stations that kept prices low were labelled as “good-hearted gas stations.”