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

Gasoline tax cut stays at 15%; diesel and butane at 25%

South Korea will extend its temporary fuel tax cuts by two months through Sept. 30.

The Ministry of Economy and Finance said on July 24 that the government discussed its fuel tax policy from August onward at a task force meeting on consumer prices and living costs. The meeting was chaired by Deputy Prime Minister and Finance Minister Koo Yun-cheol at the Government Complex Seoul.

The current tax cuts will remain in place through Sept. 30. The reduction rates are 15% for gasoline and 25% for both diesel and butane.

That means fuel taxes will stay 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 prices of petroleum products last month to reflect falling global oil prices after an agreement to end the war in the Middle East. It added that uncertainty in the region has persisted, making it necessary to preserve room to adjust fuel taxes if needed.

It also said it kept relatively larger cuts on diesel, which is essential for industry and logistics, and on butane, which is widely used as fuel by lower-income households and small trucks, to minimize the burden on ordinary people.

The government plans to swiftly implement the measure after submitting revisions to the enforcement decrees of the Transportation, Energy and Environment Tax Act and the Individual Consumption Tax Act to vice-ministerial and cabinet meetings.

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