Four Oil Refiners Bow at Audit After Criticism for Treating War as a "Money-Making Opportunity"

Collusion Allegations and Gas Station Business Practices Under Scrutiny
Refiner CEOs and Executives Apologize, Pledge to Improve Practices

South Korea's four oil refiners bowed their heads after facing a barrage of criticism during a National Assembly audit over soaring oil prices amid the war in the Middle East and business practices between refiners and gas stations.

Kim Jonghwa, CEO of SK Energy (front left), and other oil refinery executives take an oath as witnesses during a parliamentary audit held by the Political Affairs Committee at the National Assembly on the 12th. From right: Song Myungjun, CEO of HD Hyundai Oilbank; Kim Changsu, vice president of GS Caltex; and Lee Geonmyeong, vice president of S-OIL. Yonhap News.

At a National Assembly audit by the Political Affairs Committee on October 12, Min Byeong-deok of the Democratic Party of Korea raised a series of concerns with four oil refiners—SK Energy, HD Hyundai Oilbank, GS Caltex and S-OIL—over soaring oil prices and business practices with gas stations.

Min said, "If business practices that restrict gas stations' choices continue on the ground, and refiners put their own profits ahead of the burden on the public, it will be difficult for the public to trust how refiners set prices." He called on representatives of the four companies to apologize.

Song Myeongjun, CEO of HD Hyundai Oilbank, bowed his head and said, "I am sorry for the burden the public must have felt when oil prices surged." Lee Geonmyeong, a vice president at S-OIL, also said, "I am sorry that the burden of oil prices after the Strait of Hormuz crisis has placed a significant burden on the public."

Kim Jonghwa, CEO of SK Energy, said, "We will do our utmost to identify and address the issues related to exclusive purchase contracts."

Kim Changsu, a vice president at GS Caltex, rejected allegations of collusion, saying, "Investigations by the Fair Trade Commission and the prosecution confirmed that GS Caltex did not engage in collusion." Regarding business practices with gas stations, however, he said, "We are currently revising the relevant terms based on the standard agency contract announced by the Fair Trade Commission, where institutional improvements are needed," adding, "We will make improvements and implement them as soon as possible."

Min said, "Oil prices directly affect the cost of living for everyone, and the increase in prices has added to the public's burden." He added, "The government is also sharing the burden nationwide to address this, including by submitting a supplementary budget of 16 trillion won and implementing a price cap system."

He continued, "Comments were also made inside the refiners, such as 'a company that makes its living from war,' 'Long live Trump,' 'We'll raise prices by another 100 won today,' and 'Looks like we'll make 2 trillion won this year.'" He criticized the companies, saying, "The public is struggling with the cost of living and the country is in an economic crisis, yet the four oil refiners have treated the war as an opportunity to make money."

He also said, "People wonder why oil prices shoot up when they rise but come down so slowly when they fall." He stressed, "We need to examine whether raising prices immediately, even for supplies brought in before the war, amounts to exploiting the war to increase prices."

The business structure between refiners and gas stations also came under scrutiny. Min said, "Exclusive purchase contracts prevent gas stations from buying from the least expensive refiner." He also raised the issue of gas stations selling products without knowing their exact purchase price because the final price is determined after they receive the supply, under the practice of post-settlement pricing.

Min called for checks on whether refiners had implemented the measures to improve business practices they had previously pledged. He said, "Didn't you attend the Euljiro Committee on April 9 and sign the agreement?" He added, "The key points were expanding mixed purchasing, setting a benchmark price for one day's sales, and improving post-settlement practices."

He continued, "Six months have passed since the agreement was signed," stressing, "We must make sure the commitments are being properly upheld."

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