[2021 National Audit] Government Moves Toward Fuel Tax Reduction... Hong Nam-ki "Action Next Week" (Comprehensive)

National Assembly Budget Committee National Audit

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is attending the National Assembly's Planning and Finance Committee audit held at the National Assembly on the 20th, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

[Sejong=Asia Economy Reporter Son Seon-hee] The government has virtually decided to cut fuel taxes to alleviate the impact of soaring oil prices on the livelihood economy. On the 20th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said, "Domestic gasoline prices have risen significantly, and there is an impact on the real economy, so the government is currently reviewing a fuel tax cut," adding, "There will be measures around next week."

At the National Assembly's Planning and Finance Committee's audit on the same day, in response to a question from Seo Byung-soo, a member of the People Power Party, about the possibility of a fuel tax cut, Deputy Prime Minister Hong replied, "We have been reviewing it internally." He added, "We are looking into reducing the tax per liter in the same way as in 2018," but was cautious about specifying the exact reduction rate, saying, "We are considering several alternatives."

This year, tax revenue has exceeded expectations significantly, so the burden of reduced tax revenue due to the fuel tax cut is expected to be minimal. As of August, the excess tax revenue was about 55.7 trillion won. Looking at the 2018 fuel tax cut case, it was applied for a total of 10 months?15% for 6 months and 7% for 4 months?with a resulting tax revenue reduction of about 2.6 trillion won.

According to the New York Mercantile Exchange (NYMEX) on the previous day (Eastern Time), the November West Texas Intermediate (WTI) crude oil price closed at $82.96 per barrel, up $0.52 (0.63%) from the previous day. This is the highest level in about seven years since October 2014.

With international oil prices approaching $83 and the won-dollar exchange rate rising, the perceived burden of oil prices domestically has further intensified. According to Opinet, the oil price disclosure information from the Korea National Oil Corporation on the same day, the average gasoline price in Seoul rose by 5.21 won from the previous day to 1,813.83 won per liter, marking the highest level in seven years. With food prices such as rice, pork belly, and eggs already high, the rising fuel prices are immediately impacting the livelihood economy.

At present, it is difficult to predict how long this high oil price trend will continue. When asked about the oil price outlook, Deputy Prime Minister Hong said, "International oil prices are at their highest level since October 2018," and added, "I think the high oil prices will not drop quickly for the time being."

This content was produced with the assistance of AI translation services.