By Ryu Jin
Staff Reporter
Drivers will have to wait for a couple more weeks to feel the benefit of the oil tax cut. Moreover, the 10-percent reduction is likely to be temporary at best, as it is expected be offset by soaring international crude prices.
Some additional measures are considered to cushion the impact of high oil prices. But the government has found itself in a dilemma since such moves could collide with its policy goal of boosting domestic consumption and reviving the economy.
According to the Ministry of Strategy and Finance and the Ministry of Knowledge Economy, Monday, the government cut taxes on gasoline and diesel products by 10 percent.
Gasoline and diesel prices should go down by 82 won ($0.09) and 58 won per liter, respectively. With Dubai crude near $100 per barrel in recent weeks, pump-up prices have soared to 1,900 won per liter, almost double that of a year ago.
However, it takes at least two to three weeks for gas stations to sell products taken out of refineries from Monday.
Government agencies are set to monitor about 12,000 gas stations across the country until April 15 to ensure the tax cut leads to consumer benefits as quickly as possible. However, the tax reduction may fail to benefit consumers unless international crude oil prices stabilize.
The price of Dubai crude, a benchmark for Asian refiners, was $96.26 per barrel late last week, setting a new record.
International oil prices in the third and fourth weeks of February, which directly affect domestic gas prices in the second week of this month, averaged $106.84 and $109.57, respectively.
The government plans to expand a nationwide campaign to leave private cars at home at least one day a week.