Gyeonggi Special Judicial Police Arrest 27 People for Illegal Distribution of Petroleum Worth 10.3 Billion Won

Gyeonggi Provincial Government

Gyeonggi Province has uncovered a group of 27 operators involved in the illegal distribution and sale of petroleum products worth approximately 10.3 billion KRW, including selling under-measured and counterfeit petroleum, and conducting cash transactions without tax documentation with unregistered suppliers.

The Chief of the Gyeonggi Province Special Judicial Police Unit announced on the 8th that from July last year to May this year, they investigated illegal distribution and sales of petroleum products, arresting 27 individuals including Mr. A on charges of violating the Petroleum Business Act and the Measurement Act. Sixteen of them were referred to the prosecution, and the remaining eleven will be sent for prosecution once the investigation is completed.

The total volume of illegally distributed petroleum products amounted to 6.5 million liters, equivalent to 32,500 drums of 200 liters each. Valued at approximately 10.3 billion KRW, an estimate based on the POS (Point of Sale) system data from the detected gas stations suggests that consumer damage affected as many as 120,000 people.

Among the apprehended operators, four individuals including Mr. A were general agency petroleum sellers and delivery drivers who installed illegal control devices on mobile sales vehicles’ fuel pumps to dispense about 10% less diesel than the measured amount. Notably, despite being caught in April last year and under investigation, they were re-arrested in April this year during a joint on-site crackdown by the provincial special judicial police and the Korea Petroleum Management Service using the same method. They illegally distributed and sold a total of 1,560,297 liters of diesel worth approximately 2.34 billion KRW.

Twelve gas station operators including Mr. B procured diesel and other fuels at prices lower than market rates through cash transactions without tax documentation from unregistered suppliers. To conceal these undocumented transactions, they falsified petroleum supply and demand data to appear as if they had purchased legitimate diesel and submitted these false reports to the Korea Petroleum Management Service. After being caught, they attempted to avoid administrative penalties by applying for representative changes (succession) and business closures with the relevant authorities. They illegally distributed and sold a total of 4,711,000 liters of diesel worth about 7.59 billion KRW.

Mr. F operated a gas station in partnership with an unofficial representative and an undocumented supplier, illegally distributing and selling large quantities of undocumented diesel on two occasions. Mr. G deleted POS (Point of Sale) sales volume records twice to evade detection.

Mr. H conspired with acquaintances, including an unofficial representative who was the mother of a friend undergoing medical treatment, undocumented suppliers, and transporters to illegally distribute and sell large amounts of undocumented diesel. He also illegally distributed and sold 11,300 liters of counterfeit petroleum worth 20 million KRW, which mixed ship diesel with undocumented diesel, and stored 1,500 liters in an underground storage tank before being caught.

Using counterfeit petroleum, such as ship diesel or heating kerosene mixed with automotive diesel that contains sulfur levels up to ten times higher than normal diesel, releases harmful substances into the human body, causing severe air pollution. It can also cause malfunctions in vehicles and construction equipment, leading to major safety accidents.

Under the current Petroleum Business Act, those who manufacture, store, or sell counterfeit petroleum face imprisonment of up to five years or fines up to 200 million KRW. Those who sell under-measured quantities, conduct undocumented transactions, or sell kerosene as fuel face imprisonment of up to two years or fines up to 50 million KRW.

Additionally, installing illegal control devices on mobile sales vehicles’ fuel pumps to sell under-measured quantities is punishable under the Measurement Act by imprisonment of up to three years or fines up to 30 million KRW. Violating businesses also face administrative sanctions such as business suspension or fines from the relevant authorities.

Kim Kwang-deok, Chief of the Gyeonggi Province Special Judicial Police Unit, emphasized, "Illegal petroleum product distribution causes mechanical wear on vehicles, safety accidents, harmful gas emissions leading to environmental pollution, harms public health, and results in national tax revenue losses. We will eradicate illegal distribution through joint on-site crackdowns with the Korea Petroleum Management Service in the petroleum distribution industry."