Gas stations on South Korea's Jeju Island have been penalized by the Fair Trade Commission (FTC) for setting the next day's fuel prices in advance and requiring member stations to follow them in unison. The FTC concluded the conduct was collusion that artificially blocked price competition and increased consumer burden, imposing fines exceeding 2 billion won on the businesses involved.
The Fair Trade Commission said Friday it had imposed corrective orders along with a combined 2.05 billion won in fines on the Jeju branch of the Korea Gas Station Association, Jeju City Nonghyup and Seogwipo Nonghyup for price-fixing.
An investigation found that from September 2022 to July 2024, they shared price information by having Nonghyup gas stations pass on the next day's gasoline, diesel and kerosene prices to the association in advance, before their disclosure on Opinet. The association used these as de facto standard prices and relayed them to member stations through KakaoTalk group chats and text messages, and the member stations adjusted their selling prices accordingly.
The association also identified stations that did not match the prices and continually demanded compliance with the standard prices. The Jeju branch currently has 116 local gas stations as members.
The FTC analyzed that such collusion led Jeju consumers to buy fuel at higher prices than on the mainland. During the collusion period, the average gasoline price in the Jeju region was up to 83 won per liter higher than on the mainland, with diesel up to 150 won higher and kerosene up to 53 won higher. The FTC estimated that even accounting for the transportation cost burden inherent to island regions, actual selling prices could have been about 10 to 60 won per liter lower without the collusion.
The investigation found the collusion took shape as interests aligned to ease intensifying price competition between Nonghyup gas stations and general gas stations. A phone recording obtained by the FTC included a Nonghyup official proposing to the association, "How about raising gasoline prices by about 50 won starting tomorrow," and the association sharing this with member stations.
Signs of an attempt to conceal the collusion were also confirmed during the investigation. Messages posted in the group chat conveyed intentions such as, "The FTC is looking into whether there is collusion, so we will not announce prices for the time being," and "Never leak this externally."
The FTC judged the conduct to be a serious violation that undermined the competitive order, in which businesses should autonomously set prices according to market conditions, and infringed on consumers' right to choose and their welfare. The fines totaled 2.05 billion won, consisting of 30 million won for the Jeju branch of the Korea Gas Station Association, 987 million won for Jeju City Nonghyup and 1.033 billion won for Seogwipo Nonghyup.
"This is the first case in which not only a business association's price collusion but also the member businesses that actively participated in the collusion were penalized together," an FTC official said. "We will continue to monitor price collusion in the fuel market, which is closely tied to people's daily lives."
