SK Energy is taking steps to increase transparency in oil product transactions and establish a fair market order by improving its pricing system and trading practices, while also bolstering its internal controls related to fair trading.
On Thursday, SK Energy unveiled its Oil Market Pricing Structure Reform and Internal Control Enhancement measures. These initiatives focus on improving pricing transparency and trading practices in the oil market, strengthening fair trading and internal control systems, enhancing cooperation with oil distribution customers, and maintaining its role in ensuring stable energy supply.
In June, SK Energy pioneered a new pricing policy in the industry, announcing weekly supply prices in advance and eliminating post-settlement practices. The company is currently preparing to implement this policy, including developing the necessary systems.
Going forward, SK Energy plans to actively identify and address areas requiring further improvement in the overall oil product distribution structure and trading practices by continuously listening to market and customer feedback.
The company will also enhance employee training and internal control systems to fundamentally mitigate fair trading risks. This includes expanding tailored training for employees involved in pricing and sales, mandating at least two hours of annual fair trading education per person, and regularly monitoring the proper management of relevant information during the pricing process.
For business contacts with competitors, SK Energy will strengthen its pre-approval, post-reporting, and monitoring systems. Stricter internal standards will be applied to actions that pose fair trading risks, such as exchanging pricing and sales information.
The company will reinforce its existing compliance monitoring functions and establish a system for regular inspections. This includes annual self-investigations and external audits of fair trading and internal controls to ensure swift implementation of necessary improvements.
SK Energy also plans to scrutinize existing trading practices, including full purchase contracts. The company will cooperate fully with investigations by relevant authorities and participate in future discussions. The aim is to enhance choice and predictability for distribution customers like gas stations while fostering fair and transparent trading relationships.
The company remains committed to ensuring a stable supply of oil products and maintaining supply chain stability. In response to the volatile international energy environment and supply chain uncertainties, SK Energy will continue to diversify its crude oil import sources and invest in necessary infrastructure. The company pledges to fulfill its responsibilities in ensuring stable energy supply, even during national crises.
Previously, the Fair Trade Commission launched an investigation into SK Energy and HD Hyundai Oilbank. The companies are suspected of exchanging information on pricing policies, confirmed prices, and deposit prices for gasoline, diesel, and kerosene from February 2022, just before the Russia-Ukraine conflict, until March of this year, shortly after U.S.-Iran tensions escalated.
Kim Jong-hwa, Chief Executive Officer (CEO) of SK Energy, stated that as the Fair Trade Commission’s procedures are ongoing, it will provide a thorough and transparent explanation of the facts and the position during the upcoming review process. He emphasized that it will use this opportunity to closely examine the entire oil product pricing and trading processes. It’s committed to gradually implementing measures that improve the systems and strengthen internal controls to enhance market trust.
