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Fuel tax cut extended through February as prices face instability

Published: 28 Nov. 2024, 14:18

The prices of gasoline and diesel are displayed at a gas station in Seoul. [YONHAP]

Korea's top economic policymaker said Thursday that the government will extend its fuel tax cut for two more months through next February in a bid to alleviate the financial burden on consumers.

Under the extended policy, the government will maintain a 15 percent tax reduction on gasoline and a 23 percent cut on diesel and liquefied petroleum gas.

"To address high oil prices and reduce the burden on low-income households, we plan to extend the fuel tax cut for an additional two months," Finance Minister Choi Sang-mok said during a radio interview.

The Finance Ministry later noted that the decision was influenced by continued uncertainty in global and domestic oil prices, driven by tensions in the Middle East, and concerns over rising fuel costs impacting consumers.

The updated measures will take effect on Jan. 1 and remain in place until the end of February, the ministry said.

The government first introduced the fuel tax cut scheme in November 2021 and has extended it several times, adjusting the reduction rates based on global energy market conditions.

This marks the 13th extension.

As the country relies heavily on imports for its energy needs, rising global oil prices have fueled inflationary pressures, prompting the government to take pre-emptive action.

Yonhap