The government decided to extend the fuel tax reduction measure, which was set to end at the end of April, until the end of June. However, it has decided to slightly reduce the scope of the fuel tax cut.
The Ministry of Economy and Finance noted, "Considering trends in oil prices and consumer prices, as well as the impact on the budget, we will pursue a return of the fuel tax cut but will implement partial returns to ensure that the public's fuel cost burden does not increase significantly."
The reduction rate for gasoline will be reduced from the existing 15% to 10%. The reduction rate for diesel and liquefied petroleum gas (LPG) butane will decrease from the existing 23% to 15%.
The fuel tax reduction has been extended 15 times since it was first introduced in November 2021 due to soaring international oil prices.
Currently, the price reduction effect for gasoline is 122 won per liter (ℓ). Diesel shows a reduction effect of 133 won, and liquefied petroleum gas (LPG) butane shows a reduction effect of 47 won.
As a result of this measure, gasoline will see a tax burden reduction of 82 won per liter, diesel will be reduced by 87 won, and LPG butane will have a reduced tax burden of 30 won.
The Ministry of Economy and Finance will announce a legislative notice for amendments to the 'Enforcement Decree of the Transportation, Energy, and Environment Tax Act' and the 'Enforcement Decree of the Special Consumption Tax Act.' After consultations with relevant ministries, meetings with the Vice Minister, and cabinet meetings, it is scheduled to take effect on the 1st of next month.
To prevent hoarding activities using price increases, the government will implement related regulations and establish follow-up measures, such as limiting the amount of petroleum products exported. Actions such as avoiding sales without justifiable reasons or excessively exporting to specific companies are prohibited.
The Ministry of Economy and Finance plans to thoroughly manage hoarding activities in collaboration with the Ministry of Trade, Industry and Energy, the National Tax Service, and the Customs Service. The Ministry of Trade, Industry and Energy, the Petroleum Management Center, the Consumer Agency, and each city and province will accept reports of hoarding activities until July 31 of this year.