The government will extend the temporary fuel tax cut, which was set to end at the end of this month, by two months to the end of September. The current fuel tax cut rates—15% for gasoline, 25% for diesel, and 25% for butane—will remain in place.
The Ministry of Finance and Economy held a task force (TF) meeting of related ministers on special management of prices affecting people's livelihoods on the 24th and announced this fuel tax operation plan.
The 15% cut for gasoline fuel tax, 25% for diesel fuel tax, and 25% for butane fuel tax will continue through Sept. 30. Compared with pre-cut rates, the price reduction effect per liter (L) is 122 won for gasoline, 145 won for diesel, and 51 won for butane.
The ministry said, "With instability in the Middle East unresolved, it is necessary to leave room to adjust fuel taxes to respond to potential increases in oil price volatility going forward."
The government first implemented a fuel tax cut at the end of 2021 to ease the burden on low-income households caused by a surge in international oil prices. Since then, it has continually extended the period of the fuel tax cut, taking into account trends in prices and the exchange rate. More recently, using the Middle East situation as a turning point, it has expanded the extent of the fuel tax cut.