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Gas prices to rise as government trims fuel tax cut through June

Published: 22 Apr. 2025, 15:08 Updated: 22 Apr. 2025, 20:43

Gasoline is being sold for 1,549 won ($1.10) per liter at a gas station in Seoul on April 21. [NEWS1]

The Ministry of Economy and Finance announced on Tuesday that it will extend the temporary cut in fuel taxes through to the end of June, while partially scaling back the level of the reduction, which will result in an increase of 40 won ($0.03) per liter in gas prices starting May 1.

The measure, originally set to expire at the end of April, will now remain in effect through June 30.

The tax discount will be reduced, as the cut on gasoline will drop from 15 percent to 10 percent, while reductions for diesel and liquefied petroleum gas (LPG) butane will be trimmed from 23 percent to 15 percent.

Fuel taxes per liter will rise accordingly starting from May 1. The gasoline tax will increase by 40 won to 738 won per liter, while the diesel tax will go up by 46 won to 494 won per liter.

LPG butane will be taxed at 173 won per liter, a 17 won increase from April, but still 30 won lower than the precut level. Taxes on gasoline and diesel are still 82 won and 87 won cheaper, respectively, per liter compared to before the tax relief program.

The government said the extension was intended to ease public burden amid continued currency pressures, even as international oil prices have shown a downward trend. The won-dollar exchange rate has remained above 1,400 in recent weeks.

Initially introduced in late 2021, the fuel tax cut has now been extended 15 times.

To prevent hoarding ahead of the tax adjustment, the government will temporarily limit fuel shipment volumes by refiners and distributors.

For gasoline and diesel, the cap is set at 115 percent of volumes from the same period last year. For LPG butane, the limit is 120 percent.

The government also warned against unfair trade practices, including unjustified refusal to sell or concentrating supply to specific buyers.

“We will work closely with the Ministry of Trade, Industry and Energy, the National Tax Service and the Korea Customs Service to monitor and prevent hoarding and protect consumers,” a Finance Ministry official said.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY LEE HAY-JUNE [[email protected]]