The Ministry of Economy and Finance said on the 22nd that it will extend the temporary fuel tax cut, which was set to end on Oct. 31, until Dec. 31. However, the reduction rate will be adjusted downward.
The gasoline fuel tax cut rate will be reduced from the current 10% to 7%. The cut rate for diesel and liquefied petroleum gas (LPG) butane will be lowered from 15% to 10%.
The ministry explained, "Taking into account recent oil price and inflation trends and the impact on public finances, we will move to restore the fuel tax cut, but decided to restore only part of it so that the public's fuel costs do not increase significantly."
With this measure, the tax burden will be reduced by ▲ 57 won per liter (ℓ) for gasoline ▲ 58 won per liter (ℓ) for diesel ▲ 20 won per liter (ℓ) for LPG butane.
Until the end of this month, the fuel tax will be cut by 82 won per liter for gasoline, 87 won per liter for diesel, and 30 won per liter for LPG butane. With the adjustment of the fuel tax cut range, it effectively increases prices by 25 won per liter for gasoline, 29 won per liter for diesel, and 10 won per liter for LPG butane.
To extend the temporary fuel tax cut, the enforcement decrees of the Transportation, Energy and Environment Tax Act and the Individual Consumption Tax Act will be implemented starting Nov. 1 after going through a Cabinet meeting.
Ahead of the adjustment to the size of the fuel tax cut, the government will enforce the Notice on Prohibition of Hoarding of Petroleum Products to prevent hoarding by the oil industry.
The core measure is a temporary restriction on the volume of fuel shipped by petroleum refiners and others for the month of October. Refusing to sell without justifiable reason or excessively shipping to specific companies is prohibited. A Ministry of Economy and Finance official said, "We plan to work with the Ministry of Trade, Industry and Energy, the National Tax Service, and the Korea Customs Service to strictly manage hoarding."