Fuel Tax Reduction Extended Until February Next Year... "Alleviating Public Burden"

The government will extend the temporary reduction of the fuel tax, which was scheduled to end at the end of this month, for an additional two months until the end of February next year.

On the 14th, the Ministry of Economy and Finance announced the operation plan for the flexible tax rates on individual consumption tax for the first half of 2024. Accordingly, the reduction rates compared to the pre-reduction rates will be maintained at -25% for gasoline, and -37% for diesel and liquefied petroleum gas (LPG) butane.

The reductions amount to approximately -205 KRW per liter (ℓ) for gasoline, -212 KRW for diesel, and -73 KRW for LPG butane.

The Ministry of Economy and Finance stated, "This extension measure was considered due to the high uncertainty in domestic and international fuel prices caused by instability in the Middle East situation and international supply and demand conditions, as well as persistent inflationary pressures."

The temporary reduction of the individual consumption tax (-15%) on power generation fuels such as liquefied natural gas (LNG) and thermal coal will also be extended for an additional six months until the end of June next year. This measure takes into account the financial conditions of energy public enterprises due to the burden of power generation costs.

The government plans to implement the amendments to the 'Enforcement Decree of the Individual Consumption Tax Act' and the 'Enforcement Decree of the Transportation, Energy and Environment Tax Act' starting January 1 next year, after public notice, vice-ministerial meetings, and Cabinet meetings.

On the 4th, at a gas station in Seoul, domestic gasoline and diesel prices have continued to decline for eight consecutive weeks, with gasoline being sold at 1,649 KRW per liter and diesel at 1,629 KRW per liter. Photo by Jinhyung Kang aymsdream@