Oil refiners and their executives accused of colluding to fix fuel prices have been brought to trial, allegedly taking advantage of instability in the international situation, including the United States-Iran war.
The Seoul Central District Prosecutors' Office Fair Trade Investigation Division (Director General Na Hee-seok) said on the 6th it indicted SK Energy, GS Caltex, S-Oil, HD Hyundai Oilbank and four executives, including the heads of price-setting departments and domestic sales institutional sector heads at these corporations, on charges of violating the Fair Trade Act.
Prosecutors viewed that these corporations had already stockpiled a substantial amount of crude oil when the United States-Iran war broke out in February this year, leaving no inevitable reason for a price surge, yet they spiked prices on an unprecedented scale.
Prosecutors said, "We confirmed that the main cause of the surge in petroleum product prices immediately after the war was collusion among some refiners' price-setting department heads on the timing and scale of price hikes," adding, "The post-war collusion was not a temporary deviation but a chronic collusive practice that was blatantly exposed amid an international crisis."
According to the prosecution's investigation, SK Energy colluded to raise prices across the board in a manner 30–40 won higher than HD Hyundai Oilbank. The resulting direct collusion scale was identified as 14.2 trillion won. Prosecutors found the two companies had shared deposit price information since July 2024 and set prices at fixed intervals.
The collusive prices set by SK Energy and HD Hyundai Oilbank were then followed by GS Caltex and S-Oil. This is the so-called "conscious parallelism." In oligopolistic markets and the like, it refers to aligned conduct by competitors that appears collusive in form even without an explicit collusive agreement. This was the backdrop for the similar price surge trajectory formed by the four refiners right after the war. Prosecutors said that, factoring in the spillover effects, a competition-restricting effect of about 26 trillion won occurred.
In fact, numerous indications of price-following behavior were detected in GS Caltex's price-setting department group chat and meeting minutes obtained through a search and seizure. "The institutional sector head says let's decide after looking at other companies' or budget-brand deposit prices. Crude is spiking too fast, so it's hard not to raise, but let's first get a read and sort it out," one message said.
Some also saw the wartime crisis as a chance to pursue profit. One employee said, "Product prices rose $10 yesterday. Like crazy. We're raising today's price by another 100 won. Looks like we'll make 2 trillion won this year," adding, "As expected, a company that lives off war. Long live Trump."
Prosecutors also said they confirmed an irrational distribution structure in which the operations of independently run gas stations were subordinated to refiners. According to prosecutors, these refiners signed full-quantity purchase contracts with independently run stations and then made them buy all petroleum at prices the refiners unilaterally decided. If an independently run station that had signed a purchase contract violated the full-purchase obligation, the refiners would file lawsuits seeking massive damages.
From the perspective of independently run gas stations, any opportunity to transact with other suppliers offering petroleum products at lower prices was completely blocked. Prosecutors explained, "In the end, under this irrational distribution structure, the prices of petroleum supplied to independently run gas stations rose, leading to higher retail petroleum prices for consumers, and the harm was passed on to ordinary consumers, the public."
Prosecutors also confirmed that some refiners had learned in advance about on-site inspections by the Korea Fair Trade Commission and systematically destroyed related evidence. The refinery employees who led this were indicted for obstruction of inspection under the Fair Trade Act.
Meanwhile, this collusion case was pursued not through an FTC complaint but through a direct-initiated investigation by prosecutors. Right after the outbreak of the United States-Iran war, when domestic petroleum prices soared unusually, prosecutors opened a probe into the refiners. On Mar. 23, they conducted search and seizure of the refiners and the Korea Petroleum Association, a corporate body.
Prosecutors said, "We will do everything to sustain the indictment so that sentences commensurate with the crimes can be imposed on the defendants who disrupted oil prices through collusive conduct and abuse of superior bargaining position," adding, "We will actively respond, in accordance with law and principle, to all types of fair-trade crimes that disrupt the national economy."