Industry ministry denies passing oil-price settlement responsibility to committee

The industry ministry said Tuesday that responsibility for calculating compensation payments to oil refiners under the country's maximum-price system rests with it, rejecting a newspaper report that it had passed the task to an outside committee.

In a statement responding to a Kyunghyang Shinmun article published the same day, the Ministry of Trade, Industry and Energy said the claim that it had shifted responsibility for the settlement process is "entirely untrue." The newspaper reported that a committee overseeing the maximum-price settlement had run into difficulty over cost calculations, and quoted an industry official saying the ministry had delegated the work first to the committee and then to accounting firms, leaving it unclear who answers for the conclusion.

The ministry said the review of financial support for losses under the maximum-price scheme requires judgment beyond accounting analysis, including an understanding of oil markets and legal compliance. It said it has strengthened the objectivity and fairness of the review by forming a committee that draws on experts in accounting, the oil market, law, economics and public administration.

The committee reviews and advises on the compensation support in advance, while the minister makes the final decision under the Petroleum Business Act and the regulations governing financial support for losses incurred under the designation of a maximum petroleum sales price, the ministry said. Legal responsibility for that decision also rests clearly with the ministry.

"As the support is provided from state finances, the government plans to carry out the settlement fairly after verification by experts from various fields," the ministry said.