Diesel subsidy expanded to support truckers and taxis

A truck driver pumps diesel into his vehicle at a gas station in Seoul on Tuesday. The government announced the expanding of its support to commercial vehicle drivers. [YONHAP]

The diesel subsidy will be expanded so that users of the fuel can receive more support.

Currently, the government pays 50 percent of diesel costs above 1,850 won per liter for drivers of commercial vehicles and taxis. That will be lowered to 1,750 next month, according to the Ministry of Economy and Finance on Tuesday.

Since May 1, the government has been covering half of fuel costs in excess of 1,850 won per liter.

If a gas station charges 1,960 won per liter for diesel, the government covered half of the amount exceeding 1,850 won. That means its offers a subsidy of 55 won per liter. But as the trigger price has been lowered to 1,750 won, nearly 105 won per liter will be covered by the government.

The Finance Ministry estimates that a total of 445,000 cargo trucks, 21,000 buses and 93,000 taxis qualify.

The additional support will start in June and will run through September, two months beyond when the current support program was to end.

Diesel prices have been breaking records.

The average price for a liter of diesel for the first time since July 2008 has exceeded 1,950 won. It was selling for 1,975.54 won per liter as of Tuesday.
Diesel is now more expensive than gasoline, which on the same day averaged 1,962.54 won. It is the first time diesel is more expensive than gasoline in 14 years.

The Transport Workers' Union estimates that due to the increase in the diesel price, a truck driver of a 25-ton cargo truck will spend 2 to 3 million won a month more than a year ago.

The union argues that truck drivers barely take home any income after expenses.

Finance Minister Choo Kyoung-ho on Sunday held a meeting of economic ministers in which policies were discussed to reduce the prices of diesel and flour.

"Our economy is in a serious situation with complex risks at home and abroad including the situation in Ukraine, the tightening of monetary policies in major economies and increasing inflationary pressures," Choo said during the meeting.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]