Investigation on Prearranged Gas Price

The Fair Trade Commission (FTC) declared yesterday that it has conducted a preliminary investigation on the prearrangement of gas price by gas stations, since the gas price did not drop in spite of the decline of the international oil price.

An official of the FTC said, "the FTC has collected the data of gas prices and distribution channels to investigate the gas price prearrangement in Seoul and the metropolitan area. In particular, the FTC is concentrating on the gas stations in regions where the gas price has barely dropped compared to the price in August before the crude oil price fell."

The official added, "It usually takes a considerable time for the international oil price to reflect the domestic consumer price because of the time needed for shipping, refinement and delivery. But even when considering the time difference, it is hard to understand the current speed of price decline and its rate."

For Dubai oil, the international price fell to 17 dollars per barrel from 24-25 dollars per barrel in the beginning of September, but most gas stations lowered only by 20 won from 1,314 won per liter to 1,294 won per liter in Seoul and the metropolitan area. During the same period, the oil refining companies brought down the ex-factory price by 49 won per liter.

Given the situation, the oil refining company circles estimate that one dollar drop of crude oil price per barrel usually leads to the fall of 10-13 won per liter in the domestic market.

Joong-Hyun Park sanjuck@donga.com