Gov't to prevent excessive rise in fuel prices ahead of adjustment of tax cut
This photo shows the prices of gasoline and diesel fuel at a gas station in Seoul, Oct. 26. Yonhap
The government pledged Tuesday to prevent an excessive rise in domestic fuel prices ahead of a planned adjustment to fuel tax reductions set to take effect next month, the industry ministry said.
Under the latest extension decision, the current tax reductions — 10 percent on gasoline and 15 percent on diesel and liquefied petroleum gas (LPG) — will be adjusted to 7 percent for gasoline and 10 percent for diesel and LPG. The revised rates will take effect starting Nov. 1 and will remain in place for an additional two months until Dec. 31.
The adjustment is expected to raise prices by about 25 won ($0.02) per liter for gasoline, 29 won for diesel and 10 won for LPG.
The announcement was made during a meeting presided over by the Ministry of Trade, Industry and Resource and attended by representatives from oil refiners, gas stations and related agencies.
During the meeting, the ministry asked for voluntary cooperation from refiners and gas station operators to prevent excessive price hikes following the partial rollback of the fuel tax cut.
"Although international crude prices are currently hovering around the $60 per barrel range, market volatility remains high due to factors such as U.S. sanctions on Russian oil," said Yoon Chang-hyun, an industry official in charge of energy resources policy.
Korea first introduced the fuel tax cut in November 2021 in response to surging global energy prices. The government has since extended the measure 18 times, adjusting the rates in line with changes in international market conditions.