Government Considers Extending Fuel Tax Cut Until Year-End... "Comprehensive Consideration of Prices, etc."

Review of Diesel Fuel and Gradual Reduction of Benefits

The government is seriously considering extending the fuel tax reduction benefits until the end of the year.

According to government sources on the 15th, the Ministry of Economy and Finance is expected to announce as early as later this week whether to extend the 'fuel tax reduction measure,' which is set to expire at the end of this month.

Photo by Jinhyung Kang aymsdream@

Due to adjustments in the flexible tax rate, gasoline has been reduced by 25%, and diesel and liquefied petroleum gas (LPG) butane by 37%, respectively. The current reduction rates have been maintained since January for gasoline and since July last year for diesel and LPG.

For gasoline, there is a growing consensus to extend the fuel tax reduction measure for an additional four months until the end of this year. The reasoning is that international oil price trends must be taken into account.

International oil prices and gasoline prices are currently higher than when the current reduction rates were set in December last year.

For diesel, which has a relatively larger reduction rate, a phased reduction of benefits is being considered.

A government official explained, "We plan to decide on whether to extend the measure by comprehensively considering trends in international energy prices, domestic gas station fuel prices, and consumer price conditions."