Korean Oil Firms Decide to Keep Oil Price Confidential

Korea’s domestic oil industry is clamoring for a halt to the release of oil price information.

SK Energy announced on July 29 that it would no longer provide consumers with ex-factory gasoline prices (ex-factory prices plus tax) that had been revealed weekly. Prior to this, GS Caltex also stopped releasing its standard oil price on June 20, and S-Oil and Hyundai Oilbank kept the related information confidential as well.

SK Energy noted, “The government will report monthly pump prices in our oil industry from the end of this month.” The firm added, “A separate release of this information would cause confusion.”

However, it has been noted that the industry’s move came from the big difference between oil companies’ standard ex-factory prices and consumer sentiment prices, resulting in consumer complaints.

Domestic oil firms usually fix the price each month and apply 30 different discount prices based on gas station grades. Accordingly, ex-factory price and each gas station’s oil price can be different in large measure.

As for the industry’s decision, GS Caltex said, “Although the ex-factory price moved down, some gas stations’ oil prices went up. Our industry has been criticized for providing sham prices.”

Regarding this, one official from the oil import industry said, “If domestic oil companies did not provide a standard oil price by which consumers assume the ex-factory prices, the transparency of the price decisions could be hurt.”

larosa@donga.com