State oil company chief apologizes for steep price hikes at gov't-run stations
Korea National Oil Corp. (KNOC) President and CEO Son Joo-suk presides over an emergency meeting on stored crude oil in Korea amid the Iran crisis at the company's headquarters in Ulsan, Tuesday. Courtesy of KNOC
The chief of the Korea National Oil Corp. (KNOC) apologized Wednesday for steep price hikes at government-run gas stations, as Seoul seeks to rein in soaring oil prices at home amid the ongoing conflict in the Middle East.
"We deeply regret that some budget gas stations, which should be at the forefront of stabilizing market prices of petroleum goods, increased their consumer prices in a short period of time," Son Joo-suk, president and CEO of KNOC, said in an official statement.
"As the head of KNOC, I feel a heavy responsibility and offer my sincere apologies," he said.
Son's apology came amid growing controversy over steep price hikes at some stations of the government-run budget gas station chain.
One of them raised its diesel price by 606 won ($0.41) per liter in a single day on Thursday, the highest daily increase among all gas stations across the country that day. Its total price increase reached 850 won per liter over five days since the outbreak of the conflict in Iran.
The KNOC chief explained that excessive price hikes were seen at some individually operated outlets due to their "deviant behavior." He emphasized that his company has been working to supply fuel at lower prices since the turmoil in the Middle East to ease the energy cost burden on the people.
Currently, there are 1,319 budget gas stations across the country. Of them, only 395 are operated by KNOC, while the rest are managed by individuals.
Budget gas stations were introduced in 2011 to promote competition in the fuel market dominated by a few oil refiners.
KNOC and other companies, such as the National Agricultural Cooperative Federation, have supplied fuel to budget gas stations at prices below market rates through joint purchases, helping to keep fuel prices at other gas stations nearby in check.
In a separate statement, the minister of trade, industry and resources also apologized for the price increases.
"As the minister in charge, I deeply regret that such an incident happened at a budget gas station, which should be setting an example," Industry Minister Kim Jung-kwan said in the statement.
He noted that his ministry will act sternly against any unfair price hikes or attempts to disrupt the fuel market. Under such an initiative, the ministry plans to check gasoline price trends at budget gas stations across the country, and take strong measures against those that excessively raise prices.
The government currently plans to take steps to implement a capping system on local fuel prices after President Lee Jae Myung called for a swift launch of the system to contain a jump in gas prices as the U.S.-led war with Iran has intensified in the Middle East.