The government will extend the temporary fuel tax reduction measure by two more months until the first half of this year, but the reduction rate will be partially scaled back.
On the 22nd, the Ministry of Strategy and Finance announced that it would implement the revised enforcement ordinances of the Traffic, Energy and Environment Tax Act, and the Individual Consumption Tax Act, which include these details, starting from the 1st of next month after announcing them and going through a cabinet meeting.
The temporary fuel tax reduction measure was originally scheduled to end this month. However, with this revision, it has been extended for an additional two months until June 30th.
The reduction rate for gasoline will be reduced from the initial 15% to 10%. The rate for diesel and liquefied petroleum gas (LPG) butane will be reduced from 23% to 15%.
Accordingly, starting next month, a fuel tax of 738 won per liter will be applied to gasoline, and 494 won to diesel. This represents an increase of 40 won and 46 won, respectively, compared to this month.
Comparing to before the reduction measure, the fuel tax burden has decreased by 82 won per liter for gasoline and 87 won for diesel.
For LPG butane, the rate will rise to 173 won per liter next month, which is 17 won higher than this month’s 156 won. Compared to before the reduction measure, it is 30 won cheaper.
The government appears to have slightly reduced the fuel tax reduction margin reflecting the recent decline in international oil prices. However, it is observed that they extended the reduction measure considering factors such as the won/dollar exchange rate surpassing the 1,400-won level and the public burden.