Gov't to expand tax cuts on LPG butane next month; review stronger punitive measures against collusion
Gas prices are displayed at a gas station in Seoul, Wednesday. Yonhap
The government announced Thursday it will more than double fuel tax cuts on liquefied petroleum gas (LPG) butane products starting next month, while pushing for stronger penalties against collusion, in a bid to stabilize market prices directly affecting people's livelihoods.
Under the latest measure to support people's livelihoods, the current 10 percent tax cut on butane will be expanded to 25 percent until the end of June, according to the Ministry of Finance and Economy.
The ministry said it made such a decision as the impact of international LPG price hikes caused by the Middle Eastern crisis is expected to be felt domestically beginning in May. It added the move can help lower financial burden for butane users, who are mostly in the low-income group.
International butane prices have jumped nearly 50 percent to an average of $800 per ton this month from $540 per ton in March.
Late last month, the government also more than doubled tax cuts on gasoline and diesel from 7 percent and 10 percent to 15 percent and 25 percent, respectively, through the end of May.
The finance ministry said the intergovernmental inspection team has nabbed 99 cases of petroleum business law violations through intensive crackdowns on more than 5,700 gas stations nationwide, including cases of false reporting and hoarding.
The government will continue its ongoing effort to lower the burden on people's livelihoods, the ministry said, noting that the country saw a modest pace of consumer price inflation of 2.2 percent in March, but it's expected to see higher inflation in the mid-2 percent range or higher in April with an increase in fuel prices.
The ministry added it will also continue measures to stabilize supplies of key industrial materials, such as naphtha and urea, to minimize the impact of the Mideast crisis on domestic industries.
As a further move to stabilize market prices affecting people's livelihoods, the Fair Trade Commission (FTC) said it will push for stronger punitive measures against companies that get involved in collusion cases repeatedly, including revocation of registration and licenses, and business suspension.
The FTC is reviewing amending related laws to allow such measures for companies in industries where business registration or approval is needed, like construction and real estate, according to its officials.
The antitrust regulator is also considering introducing a system that would allow the FTC to order the dismissal or suspension of executives involved in collusion, and reforming the litigation system to make it easier for victims of such cases to pursue compensation for damages.
Additionally, the regulator said it plans to strengthen financial penalties for collusion, imposing 100 percent surcharges on companies repeatedly nabbed for collusion within the previous 10 years. Currently, the FTC imposes 10 percent to 80 percent surcharges on companies depending on the number of violations committed over five years.