Government Further Extends Fuel Tax Cut Until End of April (Comprehensive)

Gasoline 7%, Diesel 10%

The government will extend the fuel tax cut, which was scheduled to end at the end of this month, for an additional two months to help stabilize prices and support the recovery of people’s livelihoods.

The Ministry of Economy and Finance announced on the 12th that it will implement the amendments to the Enforcement Decree of the Transportation, Energy and Environment Tax Act and the Enforcement Decree of the Individual Consumption Tax Act, reflecting this measure, starting from March 1.

Currently, the fuel tax is cut by 7% for gasoline and by 10% for diesel and liquefied petroleum gas (LPG) butane. Compared with the tax rates before the cut, this translates into a reduction in the per-liter price of 57 won for gasoline, and 58 won and 20 won for diesel and butane, respectively.

This is the 20th extension of the sunset period since the temporary fuel tax cut was first introduced in November 2021.

The government introduced the temporary fuel tax cut in November 2021 to respond to the spread of the COVID-19 pandemic and a sharp rise in international oil prices, and has since continued to extend the measure in increments of two to six months.

For price stabilization, the government expanded the fuel tax cut rate on gasoline and diesel to as much as 37% from July 2022, then from last year gradually reduced the size of the cut while repeatedly extending the sunset deadline.

The Ministry of Economy and Finance explained, “This extension takes into account the volatility of international oil prices and the burden of fuel costs on the public.”