The Ministry of Land, Infrastructure and Transport said on the 11th it will extend the "diesel price-linked subsidies" for two months to reduce fuel costs for the transportation and logistics industries. It also decided to increase the size of the diesel price-linked subsidies.
The diesel price-linked subsidies are a program that covers 50% of the amount exceeding 1,700 won per liter when the diesel price goes above that level. The beneficiaries are diesel-using cargo trucks, route buses, and taxis. The subsidies expired on the 1st of last month, but the payment period will be extended through April. The move reflects higher international oil prices due to instability in the Middle East.
The payment rate will be raised from "50% of the excess" to "70% of the excess." The Ministry of Land, Infrastructure and Transport (MOLIT) expects fuel costs to fall by up to 440,000 won per month for a 25-ton cargo truck. The subsidies will also be applied retroactively to fuel already purchased from the 1st to the 10th of this month.
The Ministry of Land, Infrastructure and Transport (MOLIT) will use the driving portion of motor vehicle taxes within fuel taxes as the funding source for the subsidies. The surplus from the driving portion of motor vehicle taxes collected in January and February is said to be more than 100 billion won.