South Korea Extends Fuel Tax Cuts Through Sept. 30 on Middle East Uncertainty

Gasoline tax cut remains at 15%; diesel and butane stay at 25%

South Korea will extend temporary fuel tax cuts for two more months through Sept. 30.

The Ministry of Economy and Finance said on July 24 that the plan was discussed at a task force meeting on consumer prices at the Government Complex Seoul, chaired by Deputy Prime Minister and Finance Minister Koo Yun-cheol.

Under the extension, current fuel tax cuts will remain in place through Sept. 30. The reduction rates are 15% for gasoline and 25% for both diesel and butane. That will keep the fuel tax at 698 won a liter for gasoline, down 122 won from the pre-cut rate; 436 won for diesel, down 145 won; and 152 won for butane, down 51 won.

The government said it lowered the maximum price of petroleum products last month to reflect falling global oil prices after an agreement to end the war in the Middle East. It added, however, that continued uncertainty in the region made it necessary to preserve room to adjust fuel taxes.

It also said it kept relatively larger cuts for diesel and butane to minimize the burden on ordinary people. Diesel is essential for industrial and logistics sites, while butane is widely used in small trucks and as a fuel for working-class households.

The government plans to implement the measure quickly after revisions to the enforcement decrees of the Transportation, Energy and Environment Tax Act and the Individual Consumption Tax Act are taken to the vice ministers' meeting and the Cabinet meeting.

Park Su-rim, Hankyung.com reporter paksr365@hankyung.com