The government is facing fresh controversy as local refiners and gas station owners vent fury at the government’s push to curb fuel prices.

The Ministry of Knowledge Economy has been striving to contain runaway petrol prices in the wake of rising inflation.

Despite a recent decline amid concerns about the global economy, Korea’s benchmark Dubai crude has hovered above $100 a barrel following political turmoil in North Africa and the Middle East early this year, pushing consumer prices to  top 2,300 won ($2.13) per liter at some stations in Seoul.

Under pressure, SK Innovation, GS Caltex, S-Oil and Hyundai Oilbank all lowered prices of gasoline and diesel by 100 won per liter between April and June.

But costs went up again after the temporary cuts ended and inflation persisted, prompting the government to come up with extra measures ― setting up state-funded “alternative gas stations” and expanding non-franchise and self-service stores.

What enraged refiners was last week’s news that the government is considering importing petroleum products from Japan. Ministry officials denied the report.

“If it’s true, it seems to us the government is trying every option it has, but nothing is really working out,” an industry official said.

“Shifting to Japanese gasoline by revising our own environmental standards is reverse discrimination against Korean companies.”

To legalize imports, Korea needs to change the current regulations because Korea and Japan impose different standards for the composition of gasoline. Korea in general imposes tighter rules, and thus requires cleaner fuel.

But the policy is unrealistic and unviable, another official said, adding the government had tried in the past but never succeeded.

“Adopting dirtier Japanese petrol is against Korea’s ‘green growth’ initiative and a global trend toward cleaner fuel,” the official said.

The government’s move also sparked anger among operators of local gas stations, who have seen their business teeter in the face of ever-fierce competition and temporary price cuts.

The Korea Oil Station Association, which represents gas station owners, is arranging a protest against the government’s plans. The organization is currently conducting a survey at its website to decide what form the campaign should take ― wearing ribbons, putting up drop curtains, or a demonstration or strike.

“We came to organize a campaign to cope with the government’s recent policies to threaten the livelihood of our members,” a KOSA official said.

Members of the organization have been struggling to match inroads of the large retailers into the gas station market, which is already saturated with more than 13,000 stations nationwide. Yet, self-serves recently set up by retail giants like E-Mart are rapidly biting into the business of small outlets.

In Yongin on the outskirts of Seoul, large retailer-owned self-serves account for more than 34 percent of the market, according to KOSA. In Gumi, North Gyeongsang Province, the figure tops 40 percent.

“There are more than 10 gas stations around here, but none of us are making profits since a nearby self-serve opened last year,” said a gas station owner in Yongin.

“We all cut the prices to the similar levels, but the number of customers is incomparable. There’s always a long line of cars every evening over there, while we’re just watching television until a customer drives by.”

By Shin Hyon-hee (heeshin@heraldcorp.com)