Fuel tax break is partially extended until Aug.The government is extending its tax break on fuel products until the end of August to help small businesses and other working people.
The Ministry of Economy and Finance announced Friday that it is extending its reduced taxes on gasoline, diesel and liquefied petroleum gas (LPG) butane by another four months to Aug. 31. The cuts began on Nov. 6 last year with a 15 percent reduction on fuel taxes. The reduction will be shrunk to 7 percent starting May 7.
On that day, prices for gasoline will rise 4.6 percent to 65 won ($0.06) per liter, diesel by 3.5 percent to 46 won and LPG butane by 2.1 percent to 16 won.
The ministry said the total tax break for consumers will be 600 billion won over the next four months.
“[We] made the decision by taking into account oil prices at home and abroad, the fuel price burden on working people and self-employed people, and the impact on consumption,” the ministry said in a statement.
In November, the government implemented the first fuel tax cut in a decade to stimulate spending and economic growth. The six-month-long tax relief, which had been scheduled to end May 6, lowered the gasoline tax by 123 won per liter, diesel tax by 87 won and LPG butane by 30 won.
The last time Korea put a temporary fuel tax cut in place was during the global economic meltdown in 2008, when the government cut fuel taxes by 10 percent for 10 months. International crude prices surged to $140 per barrel then.
The ministry also said in its announcement it will prohibit oil refiners from hoarding fuel products.
The price of Korea’s benchmark Dubai crude stood at $70.52 as of Thursday, compared with an average of $79.39 last October.
BY KO JUN-TAE [email@example.com]