Going forward, contracts requiring gas stations that use a refiner's brand to purchase the refiner's petroleum products in full will be abolished. In addition, the "post-settlement system," which assigns the final price one month after the order date for petroleum products and then settles, will also be scrapped.
The Korea Fair Trade Commission said on the 26th that it revised the "standard dealership contract for the petroleum distribution sector" to this effect.
The Korea Fair Trade Commission (FTC) said it will abolish full-purchase contracts and switch to mixed contracts that commit to purchasing at least 60% of products from the refiner whose brand usage is contracted.
After the pole sign system was abolished in 2008, gas stations using a refiner's brand were also allowed to blend and sell fuel from other refiners. However, if they did not use full-purchase contracts, they could face disadvantages such as suspension of subsidies by refiners, clawback of facility support funds, and damages lawsuits, so a large number of gas stations entered into full-purchase contracts with refiners.
Accordingly, the Korea Fair Trade Commission (FTC) said it prepared the provision to clearly reflect the industry's agreed-upon items in the standard contract to change such practices.
The Korea Fair Trade Commission (FTC) also prepared a rule that refiners must not unfairly discriminate in product supply prices, supply volumes, or transaction terms on the grounds that gas stations make mixed purchases.
For refiners, settlements will be made at the supply price at the time the gas station places the order, so the final price can be fixed immediately. In the industry now, gas stations first purchase at the order-time price and then settle at the monthly average price one month later, so the final price is fixed only after a considerable time has passed since the purchase.
However, because some gas stations want post-settlement, the post-settlement method may be used only as an exception upon a separate request from the gas station. Even in this case, a rule was set to settle within seven days, not over a long period like one month as before.