Korea to extend fuel tax cut by another 2 months until October

This photo shows the prices of gasoline and diesel fuel at a gas station in Seoul, Aug. 10. Yonhap

Korea will extend its fuel tax cut for an additional two months through the end of October in a bid to ease the financial burden on consumers amid ongoing volatility in global oil prices, the finance ministry said Thursday.

Under the latest extension, the current fuel tax reductions — a 10 percent cut on gasoline and a 15 percent cut on diesel and liquefied petroleum gas (LPG) — will remain in place for an additional two months through Oct. 31, according to the Ministry of Economy and Finance.

The latest decision took into account the uncertainty in domestic and international oil prices and aims to alleviate fuel cost pressures on the public, according to the ministry.

Korea first introduced the fuel tax cut in November 2021 as a response to rising energy prices. The government has since extended the measure, adjusting the rates in accordance with changes in the global energy market.

This latest move marks the 17th extension of the fuel tax relief program.

Korea, which depends heavily on imports for energy, is particularly vulnerable to external price shocks, which often lead to domestic inflation.