Hyundai Oilbank, one of South Korea’s leading refiners, said Monday that it handed out 1,000 percent of base salaries as bonuses to its staffers.
The company declined to disclose the specific amount of the salaries given. In 2021, its employees received an average of 121 million won ($94,800) per person including bonuses at a 600 percent rate.
The refiner’s lump-sum bonuses came in line with the refining industry’ stellar performance last year. In the third quarter alone, Hyundai Oilbank’s operating profit skyrocketed by 226 percent on-year to 2.8 trillion won. Adding the fourth quarter results, last year’s cumulative profit will increase even more, sources said.
“Global dynamics is the key factor that decides refining companies’ profit. Due to the prolonged impact of Russia’s invasion of Ukraine and increasing demand for heating during winter, global oil price surged which in turn spiked our retail price,” said an industry official on condition of anonymity.
The recent decision by the Organization of the Petroleum Exporting Countries and its partners’ coalition of oil-producing nations led by Saudi Arabia and Russia to maintain its policy to cut oil production by 2 million barrels a day led to an increase in global oil price.
The three crude benchmarks -- Brent Crude, West Texas Intermediate and Dubai/Oman -- showed price surges of international crude oil by 3.41-6.11 percent to $78.77-$85.91 per barrel on Friday compared to Dec. 19.
Last year, there were growing calls for imposing windfall taxes on refiners for their extra earnings. With related talks about subsidizing in recent months, the companies are compensating their employees with hefty bonuses.
Other major refining companies – SK Energy, S-Oil and GS Caltex – will soon decide the bonus rates as well.
“We haven’t decided on the bonus yet, but it is expected to be more or less similar to Hyundai OilBank’s,” said a company official from a major oil refiner who requested anonymity.
Last year, SK Energy and GS Caltex provided 1,000 percent of base salaries as extra payment to employees, while S-Oil gave bonuses at a 1,400 percent rate.