Executives from South Korea's four major oil companies will testify at a National Assembly hearing. The hearing is expected to cover a wide range of topics, including fuel dispensing methods, price-fixing investigations, and compliance with cooperation agreements. Notably, this hearing will serve as a test of accountability for Heo Se-hong, Vice Chairman of GS Caltex, who is considered a candidate for the next chairman of the GS Group.
According to political sources, Heo, along with Kim Jong-hwa, CEO of SK Energy; Song Myung-jun, CEO of HD Hyundai Oilbank; and Anwar Al-Hizaji, CEO of S-Oil, are scheduled to appear as witnesses at the National Assembly's Political Affairs Committee hearing on October 12.
The committee has summoned the executives to verify the fuel dispensing methods employed by the oil companies. It will also examine whether the cooperation agreement signed between the oil and gas industries and the Korea Gas Station Association in April is being properly implemented.
In April, the four oil companies and the association agreed to relax full purchase contracts, allowing gas stations to purchase up to 40% of products from other companies, and to prohibit unfair trading conditions based on purchase ratios. They also agreed to publicly announce daily sales prices and to fundamentally abolish the existing post-settlement system. In August, the Fair Trade Commission revised the standard agency contract for the petroleum distribution industry to reflect these agreements.
Heo, the son of GS Caltex's honorary chairman Heo Dong-soo, rose to the position of vice chairman at the end of last year, positioning himself as a potential leader of the GS Group. As the fourth generation of the GS family and head of a key affiliate, his stance on the oil industry's trading practices and compliance with the cooperation agreement will be closely watched during the hearing.
A source from the committee stated, "We will confirm whether the cooperation agreement signed in April is being properly implemented in the field. Witnesses will be sworn in and their testimonies will be scrutinized closely."
As the hearing approaches, the Fair Trade Commission has also begun reviewing allegations of collusion in the oil industry, which is expected to add to the concerns of the involved companies. The commission's secretariat has initiated proceedings after determining that SK Energy and HD Hyundai Oilbank exchanged price information for about four years and agreed on two deposit prices in March of this year. The related sales amount is approximately 44.1 trillion won, and the examiner has suggested corrective measures and penalties. GS Caltex and S-Oil were excluded from the review as no evidence of legal violations was found.
The price-setting structure that the Fair Trade Commission is scrutinizing is also a key issue related to the post-settlement system outlined in the cooperation agreement. Oil companies have traditionally applied a 'deposit price' when supplying products to gas stations, followed by determining a final 'settled price' the next month to reconcile the difference. The four oil companies agreed in April to fundamentally abolish this post-settlement system through the cooperation agreement.
An industry source stated, "Currently, we are closely monitoring whether witnesses will appear and the direction of discussions at the hearing. If inquiries are made, we will sincerely explain the facts related to the issues at hand."
* This article has been translated by AI.
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