South Korea's Four Major Refiners All Indicted, Accused of Colluding on Price Hikes

South Korean prosecutors have filed lawsuits against all four domestic oil refiners, accusing them of colluding to manipulate oil prices, and characterizing the price-fixing behavior as a long-standing industry-wide malady.

According to Reuters, prosecutors announced on Monday that they have indicted four refiners and four employees from two of them, determining that the companies engaged in collusion on fuel prices, with estimated damages amounting to approximately $17 billion. South Korea currently has only four refiners: HD Hyundai Oilbank, SK Energy, GS Caltex, and S-Oil. This prosecution targets the entire refining industry, making its scope and intensity particularly rare.

The lead prosecutor in the case stated at a press conference that after the outbreak of the Iran war, the pricing directors of two refiners promptly communicated about the scale and timing of price increases, with the other two subsequently following suit and adjusting prices in coordination. Yonhap News Agency quoted prosecution sources as saying that SK Energy and HD Hyundai Oilbank are suspected of leading the collusion. SK Energy's parent company SK Innovation declined to comment, while HD Hyundai Oilbank and S-Oil had not yet responded. GS Caltex also did not reply to requests for comment in time.

Prosecutors: Collusion Is Deeply Rooted, Predating the War

The prosecution's allegations reveal that this oil price anomaly was not merely caused by geopolitical shocks but has deeper structural roots. The lead prosecutor stated:

"We found that the surge in fuel prices following the Iran war stemmed from long-standing and widespread collusion practices within the industry."

Prosecutors also disclosed that one of the four indicted employees had "been exchanging pricing information with employees of competing companies for years prior to the war" and has been arrested. Additionally, four other individuals were indicted, but prosecutors did not specify their affiliations.

Beyond charges against employees, prosecutors also pointed out that the refiners pressured gas station operators through unfair contracts to faithfully pass on the collusive prices at the consumer level, further exacerbating the actual impact on end consumers.

Regulatory Tightening: Government Cracks Down on Inflationary Pressures

Behind this prosecution is a policy context of tightening regulation of price-fixing activities amid inflationary pressures. South Korean President Lee Jae-myung has explicitly called for a crackdown on fuel price collusion to curb inflation.

South Korea relies heavily on crude oil imports, with 70% of last year's imports coming from the Middle East. After the Iran war broke out, international oil price volatility intensified, driving domestic fuel prices significantly higher and further pushing up overall price levels.

On the regulatory front, South Korea's Fair Trade Commission has raised the minimum fine ratio for collusion from the previous 0.5% to 10% of the relevant sales amount, signaling a significantly reduced tolerance for such practices. Meanwhile, authorities have also launched surprise inspections of multiple gas stations to check for unreasonable price hikes, and stations that maintain low prices have been designated as "conscience gas stations" and commended.