With the Middle East war pushing up global oil prices, the price of tax-exempt fuel for agriculture has also become more expensive, data showed.
According to the Oil Price Information System (Opinet) on the 26th, the price per liter (L) of tax-exempt diesel is 1,499.15 won. That is up 35.8% from 1,103.95 won on the 2nd of last month. Considering that regular diesel rose 25% over the same period, the price increase for tax-exempt diesel is steeper.
Tax-exempt diesel was around 1,100 won before the Middle East war broke out, but jumped into the 1,300-won range a week after the war began. It topped 1,400 won this month. Tax-exempt diesel is used in farm machinery such as tractors, combines, and cultivators, and usage increases during the busy season for rice planting and seeding.
Prices of essential farm inputs such as agricultural plastic film and fertilizer are also rising, and with tax-exempt fuel prices jumping as well, the burden on farms is growing. Such increases in production expense raise the possibility of higher agricultural product prices.
In this regard, the Ministry of Agriculture, Food and Rural Affairs reflected 62.3 billion won in oil price-linked subsidies for tax-exempt agricultural fuel in the supplementary budget to reduce farms' fuel cost burden. The ministry plans to pay the oil price-linked subsidies to farms starting in mid-next month.