'Preventing Fraudulent Claims of Fuel Tax Subsidies' Ministry of Oceans and Fisheries, Korea Oil Management Corporation, and Related Agencies Strengthen Information Sharing to Stop It

Partial Amendment to the Shipping Act Passed at Cabinet Meeting on the 24th

[Sejong=Asia Economy Reporter Joo Sang-don] To prevent fraudulent claims of fuel tax subsidies paid to domestic cargo transport operators and to establish transparent maritime fuel distribution procedures, information sharing among related organizations such as the Ministry of Oceans and Fisheries and the Korea Petroleum Management Service will be strengthened.

The Ministry of Oceans and Fisheries announced that the amendment to the "Shipping Act," which includes these provisions, passed the Cabinet meeting on the 24th and is scheduled to be submitted to the National Assembly in early next month.

The fuel tax subsidy system was introduced under the "Petroleum Price Rationalization Policy" announced in 2001, whereby the government provides a subsidy of 345.54 KRW per liter of diesel fuel from the increased fuel tax to domestic cargo transport operators. It was introduced to minimize the impact of fuel tax increases on the transportation industry. Last year, approximately 24.5 billion KRW in fuel tax subsidies were paid to 264 companies and 541 vessels nationwide.

Previously, in September last year, the Ministry of Oceans and Fisheries signed a memorandum of understanding with the Korea Coast Guard, Korea Customs Service, and the Korea Petroleum Management Service to prevent fraudulent claims of fuel tax subsidies and established a regular joint inspection system. However, to verify fraudulent subsidy claims, related data must be shared among agencies, but there has been no legal basis for this, causing difficulties in securing data.

In particular, whether the maritime fuel subject to subsidy payments is distributed normally (with proper tax levied) can only be confirmed by utilizing the Petroleum Supply and Demand Reporting System of the Korea Petroleum Management Service. However, this information is classified as confidential under the "Petroleum and Petroleum Substitute Fuel Business Act," so until now, the Ministry of Oceans and Fisheries has been paying subsidies based on limited information it holds.

Accordingly, the Ministry of Oceans and Fisheries amended the Shipping Act to allow requesting data provision from related agencies when necessary for fuel tax subsidy payments, and the requested agencies must comply unless there is a legitimate reason not to.

Kim Jun-seok, Director of the Shipping and Logistics Bureau at the Ministry of Oceans and Fisheries, said, "With this amendment to the Shipping Act, it will be possible to verify the normal distribution of maritime fuel, securing the effectiveness of national subsidy payments." He added, "We will strengthen joint inspections and cooperation with related agencies to establish a transparent and clean domestic shipping market order."

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