[2021 National Audit] Hong Nam-gi "Fuel Tax Reduction Until After Winter"

National Assembly Planning and Finance Committee Audit

Deputy Prime Minister for Economy Hong Nam-ki is attending the National Assembly's Public Accounts Committee hearing on the Ministry of Economy and Finance, the Bank of Korea, and others held at the National Assembly on the 21st, responding to questions from lawmakers. Photo by Yoon Dong-ju doso7@

[Sejong=Asia Economy Reporter Son Sun-hee] As the government is considering a reduction in the fuel tax amid soaring oil prices, the reduction period is expected to continue through next year, including this winter.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, appeared at the National Assembly's Planning and Finance Committee comprehensive audit on the 21st and responded to a question from Jeong Il-young, a member of the Democratic Party of Korea, regarding the fuel tax, saying, "Considering the progress of the review, it seems we will be able to announce it around next week, and although we need to observe price trends, the reduction period will likely extend beyond the winter season."

With the government expected to announce related measures as early as the 26th, this implies that the reduction period will be at least three months or longer. The government previously implemented a temporary fuel tax reduction for a total of 10 months in 2018 when oil prices surged (15% reduction for 6 months, 7% reduction for 4 months). The government stated that this time, the tax per liter will be reduced in a similar manner.

However, the specific reduction rate has not yet been announced. Under current law, the maximum limit for fuel tax reduction is 30%.

When asked about the impact of this fuel tax reduction on the inflation rate, Deputy Prime Minister Hong replied, "It depends on the extent of the reduction, but I believe it will contribute significantly to price stabilization."