Seoul: The government announced its commitment to preventing a significant hike in domestic fuel prices as it prepares for an adjustment to the fuel tax reductions scheduled for next month, according to a statement from the industry ministry.
According to Yonhap News Agency, the latest decision will modify the current fuel tax reductions, decreasing the cuts from 10 percent to 7 percent for gasoline and from 15 percent to 10 percent for diesel and liquefied petroleum gas (LPG). These revised rates will be implemented on November 1 and will remain effective until December 31. This adjustment is anticipated to increase gasoline prices by approximately 25 won (US$0.02) per liter, while diesel and LPG prices are expected to rise by 29 won and 10 won, respectively.
The announcement was made during a meeting led by the Ministry of Trade, Industry and Resource, with representatives from oil refiners, gas stations, and related agencies in attendance. The industry ministry called for voluntary cooperation from refiners and gas station operators to mitigate excessive price hikes following the partial rollback of the fuel tax cut.
"Although international crude prices are currently hovering around the $60 per barrel range, market volatility remains high due to factors such as U.S. sanctions on Russian oil," stated Yoon Chang-hyun, an industry official responsible for energy resources policy.
South Korea initially introduced the fuel tax cut in November 2021 to address escalating global energy prices. Since then, the government has extended the measure 18 times, adjusting the rates according to changes in international market conditions.