All four major South Korean oil refineries have been sued, accused of colluding to raise prices.
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South Korean prosecutors have filed lawsuits against all four domestic oil refiners, accusing them of colluding to manipulate oil prices and characterizing this price-fixing behavior as a longstanding chronic problem within the industry.
According to Reuters, South Korean prosecutors announced on Monday that charges have been filed against the four refiners and four employees from two of them, finding that these companies engaged in fuel price collusion, causing estimated damages of about $17 billion. South Korea currently has only four refiners: HD Hyundai Oilbank, SK Energy, GS Caltex, and S-Oil. This lawsuit targets the entire refining industry, making it particularly rare in scope and intensity.
The lead prosecutor in the case said at a press conference that after the outbreak of the Iran war, pricing managers from two refiners immediately communicated about the scale and timing of price increases, and the other two followed by making similar adjustments, forming a coordinated action. Yonhap News quoted prosecution sources as saying that the two companies suspected of leading the collusion are SK Energy and HD Hyundai Oilbank. SK Energy's parent company SK Innovation declined to comment, HD Hyundai Oilbank and S-Oil have yet to respond, and GS Caltex did not reply to the request for comment in time.
Prosecutors: Collusion deeply rooted, existed even before the war
The prosecution’s charges reveal that the recent oil price volatility was not simply triggered by geopolitical shocks, but stemmed from deeper structural reasons. The lead prosecutor stated:
"We found that the surge in fuel prices after the Iran war was caused by long-term, widespread collusion within the industry."
Prosecutors also disclosed that, among the four employees indicted, one "had continuously exchanged pricing information with competitor employees for several years before the war broke out" and has already been arrested. Additionally, four other individuals have been indicted, but the prosecution has not yet specified their affiliations.
Aside from the charges against employees, the prosecution also pointed out that each oil refiner exerted pressure on gas station operators through unfair contracts, forcing them to pass on the colluded prices to consumers, further intensifying the actual impact on end consumers.
Stricter regulation, government’s strong response to inflationary pressure
Behind this lawsuit is the policy background of South Korea’s government tightening regulation on price collusion due to inflationary pressure. President Lee Jae-myung has clearly demanded a tough crackdown on fuel price collusion to curb inflation.
South Korea relies heavily on crude oil imports, with 70% of last year’s imports coming from the Middle East. After the outbreak of the Iran war, international oil price volatility intensified, leading to a sharp rise in domestic fuel prices and further pushing up overall price levels.
On the regulatory front, South Korea’s Fair Trade Commission this year has raised the minimum penalty rate for collusion from the previous 0.5% to 10% of the relevant illegal sales, showing significantly decreased tolerance for such behavior by regulators. Meanwhile, authorities have also conducted surprise inspections of gas stations to check for unreasonable price hikes, and have designated gas stations that proactively maintain low prices as "conscientious gas stations" for commendation.
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