South Korea's antitrust watchdog said Thursday it has decided to fine four local oil companies a combined 52.6 billion won (US$55.9 million) for illegal price rigging.
SK Corp., Hyundai Oilbank Corp., GS Caltex Corp. and S-Oil Corp. were found to have colluded with each other to set prices for gasoline, diesel and kerosene from April 1 to June 10, 2004, the Fair Trade Commission (FTC) said.
"Meeting reports acquired by the FTC outlining price guidelines, cross-checking to see if these guidelines were followed and complaints about possible cheating all pointed toward illicit cooperation," FTC Vice Chairman Kim Byung-bae said. He also said price hikes during the cited period matched the evidence.
Kim said while crude oil prices rose 20 won in the 71-day period, the refiners' average market price for gasoline rose 40 won. Kerosene and diesel prices went up 70 won and 60 won, respectively, in the same timeframe.
Kim said due to the severity of the illegal activities the matter has been to the prosecution for a criminal investigation.
The illegal practice is estimated to have cost consumers 240 billion won in damages, or roughly 15 percent of their combined sales during the two-month period. The four refiners' total sales from April to June were 1.6 trillion won, it said.
Top refiner SK Corp. was slapped with the largest fine of 19.2 billion won, followed by GS Caltex with 16.2 billion won, Hyundai Oilbank with 9.3 billion won and S-Oil with 7.8 billion won.
The watchdog began an investigation of the refiners in 2004, when oil product prices shot up sharply.
Once a criminal investigation is started, the FTC said, it will work with prosecutors to find further evidence of the companies' price rigging.
"The data we have, while not providing details, does give extensive circumstantial evidence that we think is sufficient in a court of law," Kim said. He added that individual consumers and civic groups could bring lawsuits against the refiners using the FTC's evidence.
The refiners denied the charges against them and said they will appeal the FTC decision. SK Corp. said it will appeal to an administrative court, while GS Caltex and the others said they will take similar actions.
SK Corp. has already been accused of price rigging its petrochemical products along with nine other companies and ordered to pay a fine of 23.8 billion won.
"It is technically impossible for oil refiners to illegally set prices," an industry observer who declined to be identified said.
He pointed out that the FTC's allegations did not provide detailed data on how the companies fixed prices, where they met to raise prices or who the executives involved are.
"The size of the fine makes it imperative for the FTC to prove in detail if the refiners worked together to increase profits at the expense of consumers, but they have not done so this time," he said.
Seoul, Feb. 22 (Yonhap News)
Four oil companies fined for price fixing |
