SK Energy and HD Hyundai Oilbank Face KFTC Hearing for Fuel Price Collusion Amid Mideast War Turmoil...Fines Could Reach 4.6 Trillion Won

Price Information Exchanged Continuously Over Four Years

From Just Before the Russia-Ukraine War Until Early This Year

'Price Collusion' Alleged Immediately After the U.S.-Iran War

Fines Could Reach Up to 4.6 Trillion Won if Maximum Rate Applied

SK Energy and HD Hyundai Oilbank, two of Korea's four major refiners, have been brought before the Korea Fair Trade Commission (KFTC) for allegedly exchanging price information and colluding on fuel prices amid volatile oil price fluctuations caused by global geopolitical crises.

A gas station in downtown Seoul. Photo by Yonhap News.

On October 7, the KFTC's Secretariat announced that it had submitted an examiner’s report to the KFTC Commission regarding the gasoline, diesel, and kerosene price collusion case involving the two companies. The report details the violations uncovered by the examiner, corrective measures, and a recommendation for monetary sanctions. The report was also sent to the parties under investigation. Those parties may submit written statements and review or copy evidence within eight weeks of receiving the report, as part of their right to defense. The KFTC plans to convene a plenary session to finalize the level of sanctions once this process concludes.

According to the examiner’s findings, from February 2022, just before the Russia-Ukraine war, through March 2026, shortly after the U.S.-Iran war, the two companies continuously exchanged key price information for gasoline, diesel, and kerosene, including incoming prices, final settlement prices, and sales policies for around four years. Notably, in March 2026, immediately following the outbreak of the U.S.-Iran war, their interaction escalated from mere information exchange to explicit price collusion—specifically, twice agreeing on the incoming price, which is the wholesale price refiners supply to gas stations and bulk buyers. The KFTC estimates that the combined sales affected by this collusion reached a daily average of approximately 30 billion won, totaling 44.1 trillion won over the period.

Transactions between refiners and gas stations operate under a "post-settlement system," where an initial incoming price is applied at the time of product supply, then a final price is settled in the following month. During this process, the two companies exchanged pricing information, distorting market competition. Oh Haeng-rok, Director General of Cartel Investigation at the KFTC, explained, "We believe the rapidly changing international oil prices due to wartime conditions served as a main driver for exchanging price information," and added, "As supply prices to gas stations fluctuated, some impact on consumer prices was inevitable."

This case highlights the closed nature of Korea's oil refining market, which has operated under a four-company oligopoly for decades. As of 2025, SK Energy holds 28.1% of the domestic light oil market, HD Hyundai Oilbank 21.0%, GS Caltex 23.3%, and S-Oil 25.5%, with these four companies dominating approximately 98% of the total market. While the KFTC's on-site investigation found no evidence of wrongdoing by GS Caltex and S-Oil, so they were excluded from penalties, the combined market share of SK Energy and HD Hyundai Oilbank alone approaches 50%, signaling their substantial influence on market competition.

The KFTC examiner determined that the actions of SK Energy and HD Hyundai Oilbank constituted serious violations, specifically price-fixing under Article 40(1)1 and information-exchange collusion under Article 40(1)9 of the Monopoly Regulation and Fair Trade Act. The examiner recommended corrective orders and monetary penalties. If the maximum penalty rate stipulated by law for unfair concerted acts (3%~10.5%) is applied to the affected revenue of 44.1 trillion won, the fine could be as high as 4.63 trillion won. Director Oh explained, "We have found these to be serious—but not extremely serious—violations, mainly because information exchange, rather than direct price fixing, was the predominant conduct."

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