Gyugae Committee Fails to Conclude on Jeongyu Wholesale Price Disclosure... Reconsideration Scheduled for the 10th of Next Month

No Conclusion Reached on Ministry of Industry Enforcement Decree Amendment... To Be Re-discussed Next Month

The disclosure of wholesale gasoline prices was brought to the discussion table of the Prime Minister's Office Regulatory Reform Committee (RRC) but no conclusion was reached. Another review is planned for the 10th of next month.

According to the Prime Minister's Office on the 25th, the Economic Subcommittee 1 of the RRC under the Prime Minister's Office held a review session the previous afternoon on the Ministry of Trade, Industry and Energy’s proposed amendment to the Enforcement Decree of the Petroleum and Petroleum Substitute Fuel Business Act, but no consensus was reached among the RRC members. The RRC agreed to hold a re-examination on the 10th of next month. If passed by the RRC, only the review by the Ministry of Government Legislation and the Cabinet meeting procedures remain.

[Image source=Yonhap News]

The amendment proposes to subdivide the currently disclosed nationwide average wholesale price into metropolitan city and province units and to disclose the wholesale prices of petroleum products supplied by refiners to gas stations. The disclosure of wholesale petroleum prices was also pursued during the Lee Myung-bak administration but was blocked by the RRC and thus not implemented. There was significant opposition arguing that price disclosure itself could rather increase the risk of collusion.

However, the Ministry of Trade, Industry and Energy holds the position that disclosing wholesale prices can lower petroleum product prices. They argue that regional differences in gasoline prices will decrease, and providing gas stations with sales price information from each refiner will foster competition among refiners.

The refining industry opposes the disclosure of wholesale prices, viewing it as an infringement on business operations. A representative from the refining industry expressed concerns, saying, "Supply contract situations differ for each agency. If this amendment passes, it could lead to the leakage of trade secrets, hinder marketing differentiation, and cause price collusion." They added, "If wholesale prices are disclosed, it could create difficulties for companies in setting prices and conducting business activities."