From Today, 20% Cut in Fuel Tax... Gasoline 164 Won per Liter

It May Take 1-2 Weeks for Price Changes to Reflect
Refinery Direct Stores and Discount Gas Stations to Reflect Prices as Quickly as Possible

Fuel price information at a gas station in Seoul on the 11th, one day before the fuel tax reduction. The government will temporarily reduce the fuel tax by 20% for about six months starting from the 12th. Photo by Hyunmin Kim kimhyun81@

[Sejong=Asia Economy Reporter Moon Chaeseok] The fuel tax will be temporarily reduced by 20% for six months starting from the 12th.

According to the government, from this day, the fuel tax imposed on gasoline will be lowered from 820 won per liter (ℓ) to 656 won, diesel from 582 won to 466 won, and LPG butane from 204 won to 164 won. Assuming the fuel tax reduction is fully reflected in consumer prices, the price per liter will decrease by 164 won for gasoline, 116 won for diesel, and 40 won for liquefied petroleum gas (LPG) butane.

Since consumer prices are determined by individual gas stations, fuel prices do not necessarily drop by the exact amount of the tax reduction. The fuel tax is imposed at the refinery dispatch stage, and fuel dispatched before the reduction is still circulating in the market. According to the government, it is expected to take about one to two weeks for the reduced prices to be applied at gas stations nationwide. Regarding this, the Korea Gas Station Association stated, "It is difficult to lower (fuel prices) immediately upon the implementation of the fuel tax reduction due to the time required to deplete inventory, but since inventory management has been conducted in line with the timing of the tax reduction, the reduction will be reflected as early as possible."

The government has requested cooperation from the refining industry to immediately reflect the fuel tax reduction in prices from this day at refinery-operated gas stations and budget gas stations, even if there is existing inventory. It is expected that prices will drop mainly at refinery-operated and budget gas stations, which account for 19.2% of all gas stations, and that consumer traffic to these stations will stimulate price reductions at independently operated gas stations.

There are concerns that consumers may find it difficult to feel the price reduction even if gas stations reflect the fuel tax cut in prices, as fuel prices have risen sharply. According to the Korea National Oil Corporation’s oil price information service Opinet, as of 5 p.m. the previous day, the nationwide average gasoline price at gas stations was 1,810 won per liter, up 1 won from the day before. This is 9 won higher than on the 6th and 116 won higher compared to the 13th of last month. In Jeju, where gasoline prices are the highest nationwide, the average selling price soared to 1,901 won per liter, and in Seoul, it reached 1,889 won per liter.

Meanwhile, from this day, the tariff on liquefied natural gas (LNG) will also be temporarily reduced from the current 2% to 0%. Price information by gas station and nearby budget gas stations can be checked through the Opinet website and mobile application (app).

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