As oil prices have surged recently due to the Middle East war, the Democratic Party of Korea summoned the domestic refining industry to the National Assembly and pointed to practices at gas stations. Exclusive contracts between refiners and gas stations, post-settlement, and refusal of card payments were cited as key issues. The Democratic Party said it will set up a social dialogue body with the refining industry to lead a win-win agreement between large companies and small business owners.
The Democratic Party's Euljiro Committee held a meeting with the refining industry on the morning of the 20th at the National Assembly Members' Office Building. Attendees included the Korea Oil Station Association and officials from SK Innovation, GS Caltex, HD Hyundai Oilbank, and S-Oil.
The Democratic Party sought the cause of rising retail fuel prices in refiners' supply prices, not at gas stations. It also noted that small gas station owners purchase fuel in bulk at the higher supply prices set by refiners, and because of the practice of paying cash up front and receiving settlement later from refiners, instability is high. The burden of fuel taxes and card fees on gas station operators was also mentioned.
Kim Nam-geun, a Democratic Party lawmaker on the Euljiro Committee, met with reporters after the closed-door meeting and said, "Crude prices have risen, but the oil hasn't even departed from the Middle East yet, so sharply raising pump prices in advance may be unfair or an abuse of a dominant position," adding, "There was also an opinion that refiners' requiring gas stations to buy the entire volume—an exclusive contract—is unfair and should be improved."
He continued, "There was also an opinion that the post-settlement transaction method—taking a higher payment first and then refunding money later—should have its settlement cycle shortened," and said, "Refiners are not allowing card payments, which violates the Specialized Credit Finance Business Act and is subject to criminal punishment."
The Korea Fair Trade Commission will investigate industry practices, and the Financial Supervisory Service will look into refusals of card payments. The Euljiro Committee also decided that refiners will establish a social dialogue body to ease the burden on small gas station owners and to produce a win-win agreement. The social dialogue body could launch as early as next week. The crude supply plan, the industry's top concern, was not discussed at the meeting.
Min Byung-deok, the Democratic Party lawmaker who chairs the Euljiro Committee, said, "Gas stations are not the ones who set fuel prices; they are merely retail businesses that receive and sell fuel as set by refiners," adding, "Today's (the 20th) meeting was to resolve the longstanding unfair practices between gas stations and the refining industry."