The government has decided to extend the reduction period for fuel taxes and the special consumption tax on automobiles and power generation fuel, which was set to end at the end of this month, in order to stabilize prices. The fuel tax reduction will be extended for the next 2 months, while the special consumption tax on automobiles and power generation fuel will be extended for the next 6 months. A 0% tariff will be applied to Norwegian mackerel, whose consumer prices are rising due to recent increases in import prices.
On the 16th, the government discussed and confirmed the 'measures to alleviate energy costs and stabilize food prices' in a meeting of vice ministers on prices chaired by Lee Hyung-il, the acting Minister of Economy and Finance.
Currently, the fuel tax benefits for gasoline are set at 10% and 15% for diesel and liquefied petroleum gas (LPG) butane. The Ministry of Economy and Finance adjusted the fuel tax reduction in April, setting the deadline for the end of this month. However, due to increased volatility in international oil prices caused by the recent Iran-Israel conflict, the decision was made to extend the fuel tax reduction to alleviate the burden on households.
The temporary reduction of the special consumption tax on power generation fuel will also be extended for 6 months. The government has temporarily reduced the special consumption tax on power generation fuel by 15% until the end of this month to alleviate the cost burden on state-owned energy companies. The government will extend the reduction of the special consumption tax on power generation fuel until the end of this year. With this extension, the flexible tax rate for power generation LNG will be 10.2 won/kg (from 12 won/kg before the reduction), and for bituminous coal, it will be 39.1 won/kg (from 46 won/kg before the reduction).
The temporary reduction of the special consumption tax on passenger cars (basic tax rate 5% → flexible tax rate 3.5%, limit 1 million won), which was set to end at the end of this month, will also be extended for an additional 6 months until the end of this year. Additionally, the government has decided to extend the 0% tariff on LPG and crude oil for LPG manufacturing, which was set to end at the end of this month, for another 6 months until the end of the year.
To stabilize food prices, tariff measures will also be expanded.
To stabilize the prices of processed foods, the 15-20% tariff measures on 4 processed fruit items, including mashed citrus and fruit cocktails, which were set to end at the end of this month, will also be extended for another 6 months until the end of the year. In particular, considering that the previously established tariff applicable quantity (5,000 tons) of fruit cocktails has mostly been exhausted, the applicable quantity will be increased by an additional 2,000 tons.
The government has decided to implement a new 0% tariff (applicable quantity 10,000 tons) on Norwegian mackerel, whose import prices have recently increased. Due to the fact that the applicable quantity of eggs processed products, which will have a 0% tariff applied until the end of the year, has mostly been exhausted, the applicable quantity will be increased to 10,000 tons.
However, the application of the 0-20% tariff measures on 8 tropical fruit items, including bananas, mangoes, and pineapples, will be terminated as planned at the end of this month. A Ministry of Economy and Finance official noted, 'We considered the recent downward trend in fruit prices.'
Acting Minister Lee Hyung-il stated, 'We have prepared measures to stabilize prices focusing on urgent issues like energy and food.' He added, 'While swiftly implementing the measures announced today, we will continue to identify tasks for price stabilization.'