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Oil price fixing suspected

Posted July. 19, 2000 12:04,   


In relation to a series of Dong-A Ilbo news reports run June 27 through July 7 raising questions about the domestic oil market¡¯s problematic structure, the People`s Solidarity for Participatory Democracy delivered an official statement July 18 urging the nation¡¯s four major oil refiners -- SK Corp., Hyundai Oil and Refining Co., LG-Caltex Corp. and S-Oil Corp -- to make clarify what reasonable oil prices are and to address suspicions about price fixing.

The PSPD has made a demand to the Ministry of Commerce, Industry and Energy, as well as the oil refining firms, to form a joint investigation committee on oil prices in which the government, refiners, experts and civil organizations participate, and submit all information related to calculating oil prices to the committee.

¡°We found several statements and explanations from the oil refining firms¡¯ unacceptable, ¡±the PSPD said in response to an explanatory advertisement by the Korea Petroleum Association that appeared in major Korean dailies since June 30 and based on an analysis of the major oil refining firms¡¯ balance sheets for 1998 and 1999.

In the statement, the civil organization also noted that considering the ever-widening gap between international and domestic oil prices, there is a high potential that domestic oil refiners will maintain or deepen high oil prices through a cartel.

In the case of gasoline, the average gap between the prices in the international market and the domestic post-refinery price, which remained at US$10.10 per barrel in 1997, increased to US$12.30 per barrel in 1998, the PSPD asserted.