Four refiners put on trial on charges of colluding to fix oil product supply prices right after war broke out between the United States and Iran denied price collusion and unfair trade allegations at their first hearing. Some defendants acknowledged the facts that they deleted materials during the Korea Fair Trade Commission investigation but argued that criminal liability does not arise.
At the Seoul Central District Court, Criminal Single Judge Department 5, presided over by Judge Ryu Ji-mi, the first trial was held on the 20th for HD Hyundai Oilbank, SK Energy, GS Caltex, S-Oil(010950), and their executives and employees on charges of violating the Monopoly Regulation and Fair Trade Act.
HD Hyundai Oilbank's head of the pricing department, Mr. A, responsible manager Mr. B, head of legal Mr. C, and GS Caltex's head of the domestic sales division Mr. D also stood trial together.
◇ Four refiners say "there was no price collusion"… legal fight also over obstruction of investigation
HD Hyundai Oilbank denied all charges related to price collusion. An attorney for HD Hyundai Oilbank said, "If you look at the indictment, it is written as if structural corruption or collusion is rampant in the domestic refining industry and as if it affected the rise in refining prices during the Iran war, but that is not true."
Regarding the charge of obstructing the Korea Fair Trade Commission (FTC) investigation, some facts were acknowledged. However, the attorney said, "Even if such conduct occurred, there is no evidence the prosecution failed to obtain, so it was not an effective act of obstruction," and noted they would contest whether a crime was established.
SK Energy also denied all charges. On the full-purchase agreements with gas stations, it argued to the effect that "it is hard to understand imposing criminal liability because the Korea Fair Trade Commission (FTC), the competent authority, had already reviewed the matter and issued corrective orders, which we referenced in concluding and carrying out the contracts."
S-Oil said it had not sufficiently reviewed the evidence record and would submit specific opinions later in writing. It nevertheless pleaded not guilty to the charges.
GS Caltex likewise denied allegations of price collusion and abuse of superior bargaining position. GS Caltex said, "Independent gas stations can choose among multiple refiners when signing contracts, and after contracting, they can refuse to renew," arguing it cannot be viewed as having unilaterally disadvantaged the stations.
GS Caltex and Mr. D acknowledged some of the acts related to obstructing the Korea Fair Trade Commission (FTC) investigation. However, they maintain that because there was no fuel price collusion, those acts cannot be evaluated as the crime of obstructing a collusion investigation.
◇ Prosecutors say "they raised supply prices together right after the war"… claim 14 trillion won in direct collusion
The key issue in this trial is whether the refiners exchanged competitors' price information and raised supply prices together.
Prosecutors believe HD Hyundai Oilbank and SK Energy exchanged price information with each other during the process of setting price policy from July 2024 to February this year. In particular, prosecutors assess that in March, when the U.S.-Iran war broke out, the price decision makers at HD Hyundai Oilbank and SK Energy agreed to sharply raise supply prices.
Prosecutors focused on refiners' price movements right after the war broke out. Unlike during the Russia-Ukraine war, when international oil prices fell on the first day of the fighting and then rose about a week later, this time domestic refiners uniformly raised supply prices immediately after the outbreak.
Prosecutors also believe the refiners had already stockpiled a considerable amount of crude oil at the time, so it was not an unavoidable situation of an immediate price surge. The gist of the indictment is that the price decision makers at HD Hyundai Oilbank and SK Energy agreed to raise prices together by having SK Energy set prices 30–40 won per liter higher than HD Hyundai Oilbank.
Prosecutors determined that GS Caltex and S-Oil also followed the price trend created by them. The two companies, which use competitors' prices as a major pricing factor, rode on the collusion by raising supply prices in line with the price increases by HD Hyundai Oilbank and SK Energy, prosecutors said.
Prosecutors calculated the scale of direct collusion at about 14.2 trillion won. Prosecutors argued that including the ripple effects from GS Caltex and S-Oil's price following, there was a competition-restricting effect of about 26 trillion won.
◇ Full-purchase contracts and obstruction of Korea Fair Trade Commission (FTC) investigation also at issue… bail hearing for Mr. A
Charges that the refiners made gas stations buy only their own products are also before the court.
Prosecutors believe the companies concluded full-purchase agreements with gas stations from January 2021 to last month and used their superior bargaining position to prevent purchases of other refiners' products. Prosecutors assess that they unilaterally notified supply prices and imposed disadvantages on stations that sourced other companies' products by claiming damages, clawing back expenses, and suspending bonus card services.
HD Hyundai Oilbank and GS Caltex also face charges of obstructing the Korea Fair Trade Commission (FTC) investigation by learning in advance of on-site inspections and deleting internal materials.
Judge Ryu also held a bail hearing that day for Mr. A, who is being tried in custody. Mr. A's side requested bail, saying there is no risk of flight or destruction of evidence and that it is necessary to guarantee the right to defense.
Prosecutors said, "Mr. A does not acknowledge any wrongdoing, there is concern about destruction of evidence, and there has been no change in circumstances since detention," and asked that detention be maintained.
The court decided to hold a preparatory hearing on the 22nd of next month to organize defendants' opinions on the evidence.