Fair trade body starts crackdown on gas companies

A massive crackdown began Friday into the oil refining companies SK Energy, GS Caltex, Hyundai Oilbank and S-Oil and the liquefied petroleum gas companies SK Gas and E1.

In the wake of President Lee Myung-bak questioning the structure of oil prices, the government began devising measures to stabilize gas prices by setting up an inter-agency task force.

Joined by the Strategy and Finance Ministry, the Knowledge Economy Ministry and the Fair Trade Commission, the task force was established at a meeting on price stabilization chaired by Vice Strategy and Finance Minister Yim Jong-ryong. The investigation into oil companies is the task force’s first mission.

Yim said, “Gas prices affect the working class the most, so we will thoroughly review the price-setting process of oil products and devise improvement measures such as distribution structure reform.”

This move was in response to President Lee’s questioning of gas prices and marks the first government action since Seoul presented a comprehensive plan to fight inflation Thursday.

At an economy countermeasures meeting at the presidential office Thursday, President Lee said, “The practices of gas stations are strange,” adding, “If a liter of oil costs 2,000 won (1.79 U.S. dollars) when the international oil price is 140 dollars per barrel, the price now should be lower than 1,800 or 1,900 won (1.61 or 1.70 dollars) because the international oil price is 80 dollars a barrel, shouldn’t it?”

In response to his comment, the Fair Trade Commission led onsite investigations at the four oil refining and two LPG companies by dispatching 100 officials from its consumer policy bureau.

The probe will focus on unfair trade between oil refining companies and gas stations. For its part, the Knowledge Economy Ministry will join forces with Korea National Oil Corp. to identify the cause of differences between international and domestic oil prices.

weappon@donga.com