Commission fines four oil refiners for price-fixing

The nation’s antitrust watchdog fined four leading local oil refiners a total of 52.6 billion won ($56 million) for fixing the prices of their oil products in 2004.
The Fair Trade Commission said yesterday that SK Corp., GS Caltex Corp., Hyundai Oilbank Corp. and S-Oil Corp. colluded on the prices of gas, kerosene and diesel sold at service stations from April to June 2004.
“During that period, their gasoline, kerosene and diesel prices rose by 40 won to 70 won per liter, while crude oil prices rose 20 won per liter,” said Kim Byong-bae, vice chairman of the commission.
According to the oil refiners’ documents, which the antitrust agency uncovered, they held “meetings for common interest” to set price guidelines and cross-checked each other to see if the guidelines were followed, Mr. Kim said.
Such price-fixing is estimated to have cost consumers 240 billion won, the antitrust agency said.
SK Corp. received the biggest fine at 19.2 billion won. GS Caltex was fined 16.2 billion won, while Hyundai Oilbank and S-Oil drew fines of 9.3 billion won and 7.8 billion won, respectively.
For SK Corp., the nation’s top oil refiner, it was the second time this week it has been slapped with a huge fine. The company and nine other petrochemical companies were fined on Tuesday for price-fixing activities on their plastic materials.
Market observers said the Fair Trade Commission’s fine yesterday was weaker than expected, because the watchdog began the investigation in 2004 and had repeatedly said it would be a big case.
“We suspect that the oil refiners’ cartel activities occurred for longer than the two-month period, but we have only partial evidence of price-fixing in other periods,” Mr. Kim said. “We will report the four oil refiners to prosecutors and, amid their investigation, more evidence of their cartel in other periods might come.”
Yesterday’s ruling can be a base for consumers to file suits against the oil refiners, which will help prevent future price-fixing, Mr. Kim said.
The oil refiners denied the charges. The Korea Petroleum Association, with the four companies as its members, said in a statement yesterday that the antitrust agency’s decision was made “without specific evidence or clear proof.”
SK Corp. said in a statement, “We will consider appealing, after reviewing the Fair Trade Commission’s final notice.” The other oil refiners also said they will take similar moves.
The companies pointed out that the antitrust agency’s allegations did not provide detailed data on how the companies fixed prices, where they met to raise prices or the names of the executives involved.

By Moon So-young Staff Writer [symoon@joongang.co.kr]