The gas station post-settlement system, cited as a cause of pushing up consumer prices, will be abolished. The post-settlement system is a method in which refiners supply petroleum products such as gasoline to gas stations and receive payment a month later based on international prices. Because gas stations buy petroleum products without knowing the price they must pay refiners, the method has been criticized for leading to higher consumer prices.
The Korea Fair Trade Commission said on the 9th that it signed a "co-prosperity agreement for the refining and plastics industries" centered on these measures. Attending were the Korea Oil Station Association; the four major refiners (SK Energy, HD Hyundai Oilbank, S-OIL, GS Caltex); the Korea Plastic Industry Association; and plastic demand companies such as CJ CheilJedang, Nongshim and Lotte Chilsung.
Under the agreement, the post-settlement system will, in principle, be abolished. Going forward, refiners must finalize and publicly announce a daily sales-based price in advance. Also, while gas stations now receive petroleum products only from refiners with which they have brand contracts, they will be allowed to buy petroleum products from refiners without such contracts. There are limits, however. The share of petroleum products that a gas station can buy from refiners without brand contracts is capped at 40% of its total purchases.
The Korea Fair Trade Commission (FTC) said, "We will reflect the improvements to refining industry transaction practices derived through these discussions in the 'standard agency transaction contract for the petroleum distribution industry,'" adding, "We plan to review measures that can correct unreasonable transaction practices."
Regarding the plastics co-prosperity agreement, large demand companies that use plastic as product containers agreed to reflect increases in materials and supplies expense when paying subcontractors for deliveries. They also agreed to pay delivery fees earlier and extend delivery deadlines.