It was learned on the 9th that 85.8 billion won to compensate Altteul gas stations for losses stemming from the implementation of the petroleum price cap system has been added to the extra budget. Under the cap system, the government covers the difference with international oil prices, but funding for Altteul gas stations had not been reflected in the extra budget. As a result, there were concerns that the losses at Altteul gas stations could be passed on to consumers.
According to reporting compiled by ChosunBiz that day, Lim Mi-ae, a Democratic Party of Korea lawmaker on the National Assembly's Special Committee on Budget and Accounts, proposed adding a project related to the Ministry of Trade, Industry and Resources' extra budget plan titled "compensation for losses at Altteul suppliers due to the implementation of the price cap system." The project budget is 85.838 billion won.
Lim said, "Altteul suppliers are excluded from compensation for losses under the price cap system, making price hikes unavoidable, and to prevent that burden from being passed on to the public, it is necessary to increase the budget by 85.838 billion won."
Altteul gas stations supply fuel at lower prices than ordinary stations by having NongHyup, Korea Expressway Corporation (KEC), and Korea National Oil Corporation (KNOC) purchase in bulk from refiners. Under their contracts, they settle the payment the day after receiving supply, then in early the following month, they reconcile the difference based on the monthly average of the Mean of Platts Singapore (MOPS) prices.
This contract structure became a problem on Feb. 28 when war broke out in the Middle East. After the price cap system took effect on Mar. 13, international prices rose further, and the Altteul gas station industry argues it is unreasonable to apply the monthly average price even for Mar. 1–12, the period before the cap took effect. Refiners counter that "under the existing contracts, settlement must be based on the average price for the entire month of March."
According to the office of Democratic Party lawmaker Seo Sam-seok, losses at the three Altteul companies are expected to reach 135.4 billion won. Specifically, Korea Expressway Corporation (KEC) would see 67.5 billion won, NongHyup 47.9 billion won, and Korea National Oil Corporation (KNOC) 20 billion won.
The government says Altteul gas stations are not eligible for loss compensation. An official at the Ministry of Trade, Industry and Resources said, "Compensation for refiners' losses is limited to the period after the price cap system took effect," adding, "This settlement dispute arises from private contracts and should be viewed separately."
If losses at Altteul gas stations are not compensated in this way, there is a high chance the costs will ultimately be passed on to consumer prices. Accordingly, the National Assembly has added 85.8 billion won to the extra budget to compensate Altteul gas stations for their losses.
The budget is scheduled to be reviewed at the Adjustment Subcommittee of the Special Committee on Budget and Accounts that day. The extra budget bill is expected to be handled at the plenary session on the 10th after reduction and increase reviews by the budget committee.