With international oil prices surging after the U.S. attack on Iran, prosecutors have launched a compulsory investigation into alleged price collusion in the refining industry.
According to legal sources on the 23rd, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Director General Na Hee-seok) is conducting raids on four refiners—SK Energy, GS Caltex, S-Oil and HD Hyundai Oilbank—and the Korea Petroleum Association.
These companies are suspected of restricting competition by prearranging to arbitrarily raise or freeze prices of domestically distributed fuel and petroleum products. Prosecutors are expected to review seized materials to determine how prices were set, whether there were coordinated industry responses, and whether information was shared at the association level.
The investigation follows the government's vow to respond strictly to fuel collusion and market disruption taking advantage of rising international oil prices. Minister Jung Sung-ho of the Ministry of Justice recently called alleged fuel collusion "a serious anti-social criminal act that seeks to turn the public's suffering into an opportunity for profiteering," and ordered the Supreme Prosecutors' Office to respond firmly under the law and principles. President Lee Jae-myung has also said the government must respond decisively to unfair profiteering related to oil price increases caused by geopolitical instability.
Prosecutors are expected to focus their efforts on determining whether price increases driven by geopolitical instability reflect actual cost burdens or result from collusion among businesses. The raids mark the first compulsory probe to scrutinize, through criminal procedures, how prices are set in the refining sector during a period of surging oil prices, drawing attention to whether the investigation will expand.