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South Korea to draw up measures to bring transparency to oil pricing

Finance Minister Yoon Jeung-Hyun vowed to bring transparency to South Koreaโ€™s oil pricing. In the past, he has accused local oil refiners of a lack of transparency in setting retail prices of oil products. He stated, “Refineries are not being transparent in how they set the prices for the oil supply. The government is currently drawing up strong measures against the oil refinery industry.” South Korea has four oil refiners who have been accused of using the fluctuations in the price of crude oil to raise prices at the pump. The oil refiners are now obligated to post prices of their products at their retail outlets, but no real information on how prices are set is provided. Yoon said, “Refiners are suspected of keeping oil prices high through the opaque distribution and price-setting processes. It is a general consensus in the market that there have been problems caused by the oligopoly market structure in the oil refinery industry, and the government shares that view.” The government of South Korea launched a task force to study the refinery industry, as part of a government initiative to curb inflationary pressure. Yoon stated that the government is looking into cutting taxes on oil products and tariffs on crude oil, in an effort to cut domestic oil prices. (March 15, 2011)