The Fair Trade Commission said Thursday that it imposed 434.8 billion won ($402.5 million) in fines on four major oil refineries for anticompetitive practices and referred three of them ― SK Energy, Hyundai Oilbank, and GS Caltex ― to prosecutors for investigation.
The corporate watchdog said it found evidence of the four colluding to prevent oil supplies to gas stations held by their competitors, thereby protecting their market share from competition.
With the exception to S-Oil, the companies were referred to prosecutors for “actively leading the collusion.”
“Their collusion has created a anticompetitive practice where gas stations cannot change their supplier without the consent of their current one,” the FTC said.
“Such illegal practices have been a growing trend since the early 1990s when more oil importers entered the market, where demand is limited. The collusion was formed to minimize competition among the four.”
SK Energy was hit with 138 billion won in fines while GS Caltex, Hyundai Oilbank and S-Oil were fined 1772.2 billion, 74.4 billion won and 45.2 billion won.
The antitrust regulator opened an investigation into the four companies after President Lee Myung-bak raised questions about runaway fuel prices on Jan. 13.
“When international crude oil prices shot up to $140 per barrel in 2008, domestic retail oil prices rose to 2,000 won ($1.7) per liter. These days, crude prices have fallen to $80-$90 per barrel. But domestic gasoline prices remain in the range of 1,800 to 1,900 won per liter. Isn’t this bizarre?” he said.
The country is the world’s fifth-largest import of crude oil and imported 872 million barrels of it in 2010 alone.
SK Energy, Hyundai Oilbank and S-Oil said they are considering taking countermeasures against the watchdog’s decision, denying all charges.
By Cynthia J. Kim (firstname.lastname@example.org