There is a saying that when oil prices rise, they shoot up like a rocket, and when they fall, they drift down like a feather. This time, domestic oil prices also surged in a short period because of the Middle East crisis. On the 11th, it was learned that "disclosing refiners' supply prices" is being pushed again by the National Assembly and the government for the first time in four years as a measure to prevent such occurrences. The idea is that if refiners disclose the prices they supply to gas stations every day, it could reduce the "rocket and feather" phenomenon.
◇ Gas prices that rise like a rocket, structural problems in the "end-of-month settlement" method
When international oil prices go up, the prices of gasoline and diesel already brought into Korea have repeatedly risen sharply as well. There is criticism that this is due to a structural problem in which refiners apply an "end-of-month settlement" method to gas stations.
Gas stations do not pay every time they receive fuel from refiners. Instead, they settle the month's volume in a lump sum at the end of the month at a price set by the refiner. For example, even if they were supplied at about 1,900 won per liter at the beginning of the month, if the end-of-month price is set at about 2,000 won, payment is made based on that.
This structure leads gas stations to preemptively raise retail prices when an increase in oil prices is expected. As a result, prices shoot up like a rocket during an upswing and drift down like a feather during a downturn.
Regarding refiners' end-of-month settlement method, the Korea Fair Trade Commission in 2008 issued a corrective order, calling it an "unfair business practice using superior bargaining position." However, in 2013 the Supreme Court ruled that it did not constitute an unfair transaction, and the end-of-month settlement method remained in place.
◇ Refiners' supply price disclosure thwarted twice... The National Assembly pushes legislation and the government responds
According to ChosunBiz reporting, lawmaker Kim Jong-min (independent) plans to introduce an amendment to the Petroleum and Alternative Fuel Business Act this month, centered on mandating a real transaction price settlement system for refiners and gas stations and disclosing supply prices.
The government is also responding to the disclosure of refiners' supply prices. At the National Assembly on the 9th, when Kim said, "We should reflect in the law the disclosure of daily and regional supply prices and require settlement at the real transaction price at the time of the transaction," Minister Kim Jung-kwan of the Ministry of Trade and Industry (MOTI) also said, "We will examine it closely." Earlier, on the 5th at a temporary Cabinet meeting, President Lee Jae-myung directed, "Create a website that provides objective price information."
This is not the first time the disclosure of refiners' supply prices has been discussed. The government previously pushed it by revising the enforcement decree of the Petroleum and Alternative Fuel Business Act in 2011 and 2022, but it was scrapped. The refining industry opposed it, citing infringement of trade secrets, and as oil prices stabilized, public opinion also cooled.
An official at the Ministry of Trade and Industry (MOTI) said, "It is true that this time the policy momentum is greater than in the past," and added, "We will comprehensively review industry opinions and market impacts."