Collusion, Abuse of Power, and Lies to the Government... Prosecutors Uncover Truth Behind 14 Trillion Won Oil Price Surge by Four Refiners (Comprehensive)

Investigation Concluded in Four Months

HD Hyundai Oilbank and SK Energy Found to Have Colluded

GS Caltex and S-OIL Deemed to Have Followed Suit

Prosecutors: "Revealing the Truth in Response to Government Demand on Oil Price Manipulation"

Prosecutors have concluded that the four major domestic oil refiners engaged in price manipulation crimes in connection with the controversy over the 'soaring oil prices' that erupted immediately after the U.S.-Iran war. After President Lee Jaemyung ordered a stern response to "anti-social misconduct that seeks to exploit the community's difficulties for unfair profiteering," prosecutors launched a compulsory investigation and, after four months, brought the refiners to trial. In the midst of inflationary instability, this was effectively the first compulsory investigation in response to government demands for a solution.

Due to the tough remarks by U.S. President Donald Trump, international oil prices are soaring, and on April 3, 2026, a gasoline and diesel price notice was placed at a gas station in Yongsan-gu, Seoul. Photo by Dongju Yoon

The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (headed by Chief Prosecutor Na Heeseok) announced on the 6th that it had indicted the four oil refining corporations—HD Hyundai Oilbank, SK Energy, GS Caltex, and S-OIL—on charges including violations of the Fair Trade Act. The head of the pricing department at HD Hyundai Oilbank, referred to as Mr. A, was indicted and detained, and the responsible manager of the same department, Mr. B, as well as the head of the legal department at HD Hyundai Oilbank, Mr. C, and the head of domestic sales at GS Caltex, Mr. D, were also brought to trial.

Earlier, President Lee Jaemyung addressed the issue of soaring oil prices at a senior aides' meeting last March, instructing that "anti-social misconduct that seeks to exploit the community's difficulties for unfair profiteering must be dealt with sternly and decisively." Subsequently, the need for a government-level response to suspicions of oil price manipulation increased, and the Fair Trade Division began a compulsory investigation, conducting raids on the four refiners and the Korea Petroleum Association that same month. Within four months of initiating the investigation, prosecutors identified structural issues surrounding the rapid surge in oil prices, including price collusion, exclusive supply agreements, and false reporting.

At a press briefing, Chief Prosecutor Na explained, "When the oil price issue emerged in early March, the Fair Trade Investigation Division had not yet finished handling the corn starch and platform cases," adding, "We requested more personnel, but it was not approved, and it is true that we initially did not intend to begin an investigation." He continued, "However, as the social controversy grew and (Minister of Justice Jeong Seongho) gave instructions, we commenced the investigation."

Prosecutors determined that the sharp price hikes immediately after the war could not be explained solely by changes in international oil prices. The refiners had already stockpiled significant quantities of crude oil, and a time lag is typically required for crude oil importation, refining, and domestic supply. While domestic prices reflected international trends with a delay during the Russia-Ukraine war, in this case, all four refiners raised prices to similar levels from the very first business day after the war broke out—a fact that drew the prosecutors' attention.

'30~40 Won Difference' Price Agreement Exploiting the War... Expanded to 14 Trillion Won Collusion

According to prosecutors, HD Hyundai Oilbank and SK Energy are suspected of exchanging price information to determine price policy from July 2024 to February of this year. Immediately after the outbreak of the U.S.-Iran war in March, it was found that the heads of the pricing departments of HD Hyundai Oilbank and SK Energy agreed to sharply increase petroleum product prices.

Prosecutors believe HD Hyundai Oilbank and SK Energy colluded to raise the transaction price by setting SK Energy's price about 30 to 40 won higher than HD Hyundai Oilbank's. Mr. A is identified as the key figure who led the price agreement with SK Energy and was indicted while detained after a court issued an arrest warrant on the 19th of last month. Mr. B also faces charges of exchanging price information with SK Energy.

GS Caltex and S-OIL were found to have followed this price trend, forming a similar pattern of price surges. While there was no clear evidence of direct price negotiations, the economic effects were essentially equivalent to collusion. In fact, a message in the GS Caltex pricing department chatroom read, "Rumor has it that HD Hyundai Oilbank and SK Energy apply daily prices," to which another replied, "Let's decide after checking other companies' or budget brands' transaction prices. The oil price has risen too much not to raise ours, but let's review and organize for now." In S-OIL's internal chatroom, messages included, "Product price went up another 10 won yesterday. It's crazy. We'll raise today's price by another 100 won. Looks like we'll make 2 trillion won this year," and, "As expected, a company that survives on war. Long live Trump."

Prosecutors estimate that the direct collusion in this case amounts to 14.2 trillion won. Considering the ripple effects from GS Caltex and S-OIL's following of the price increases, the total competitive restriction effect is about 26 trillion won. However, the price-following behavior of GS Caltex and S-OIL is classified as 'conscious parallelism', which is not subject to criminal penalties under the Fair Trade Act, and thus was excluded from the charges.

During the investigation, evidence of destruction was also found. Mr. C is accused of ordering the deletion of electronic data containing competitor price information after learning in advance about the Fair Trade Commission's on-site investigation. Mr. D was indicted for deleting an internal messenger app used to share materials from price-setting meetings.

Gas Stations Bound by Exclusive Supply Contracts..."Consumers Bear the Brunt"

The indictment also includes charges that the four refiners abused their superior bargaining position against independent gas stations. From January 2021 to last month, they are accused of signing exclusive supply contracts with gas stations, requiring them to purchase all petroleum products at prices unilaterally notified by the refiners.

Prosecutors found that the refiners maintained this unfair contract structure by imposing disadvantages on gas stations that sourced products from other companies, such as claims for damages, cost recovery, and suspension of bonus card benefits. With the refiners holding pricing power in an oligopolistic market, independent gas stations' choices were restricted, and ultimately, the burden was passed on to consumers through increased retail prices.

Chief Prosecutor Na stated, "Although the refiners and gas stations are the transacting parties, the refiners unilaterally set the prices, and even during post-settlement, the refiners arbitrarily determine the figures—it's a unique structure," adding, "Price hikes for independent gas stations eventually lead to higher retail prices for consumers."

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It was also found that HD Hyundai Oilbank, SK Energy, and S-OIL falsely reported prices to the Ministry of Trade, Industry and Energy in March of this year after significantly raising daily sales prices for gasoline and other products. Chief Prosecutor Na remarked, "They submitted false reports to the ministry, and even to documents sent to the presidential office, deceiving state institutions."

Prosecutors view this investigation as an example of uncovering the truth in response to the government's demand to address oil price manipulation. Chief Prosecutor Na stated, "In terms of the scale of collusion, this may be the largest single case," adding, "During a national crisis, the president demanded a stern response, and while multiple state agencies investigated the oil price manipulation, it was the prosecution that uncovered the truth."

Prosecutors plan to share relevant materials with the Ministry of Trade, Industry and Energy and cooperate in discussions on institutional improvements to prevent recurrence. Chief Prosecutor Na emphasized, "This is a serious crime that manipulated oil prices amid national turmoil," and pledged, "We will do our utmost to maintain the indictment so that the defendants receive punishment commensurate with their crimes, and will respond proactively to all kinds of fair trade violations in the future."

This content was produced with the assistance of AI translation services.