Lee Eokwon "March Inflation Surge Widens, Actively Considering Expanding Fuel Tax Cuts"

Policies to Ease Communication Cost Burden Including Further Price Cuts on Altteul Phone Purchases

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kim Hyewon] The government is actively considering expanding the scope of fuel tax cuts as it sees the inflation surge in March intensifying mainly due to petroleum products. Additionally, to reduce the burden of communication prices, it plans to provide policy support such as further lowering wholesale prices for budget phones in the second half of this year.

On the 1st, the government announced this at the '6th Vice Ministerial Meeting on Inflation' held at the Government Seoul Office, chaired by Lee Okwon, the 1st Vice Minister of the Ministry of Economy and Finance.

In his opening remarks, Vice Minister Lee diagnosed, "We are facing all-around inflationary pressures including a sharp rise in energy and raw material prices and supply chain disruptions due to the unexpected black swan event of the Russia-Ukraine war (an event with low probability but enormous ripple effects once it occurs)."

He added, "There is a forecast that the inflation rate in March, directly affected by the Ukraine situation, will rise further centered on petroleum products." This is interpreted as suggesting that the consumer price inflation rate for March, to be announced soon, could enter the 4% range.

Vice Minister Lee also predicted, "It is difficult to gauge how long the external uncertainties will last, so it cannot be ruled out that a relatively high inflation rate compared to the past will continue for some time."

He continued, "As mentioned at the Inflation-Related Ministers' Meeting on March 4, we are closely monitoring international oil price trends and actively considering expanding the scope of fuel tax cuts," and announced, "The final decision on whether to further cut fuel tax and the extent of the cut will be made and announced at next week's Inflation-Related Ministers' Meeting."

Regarding processed foods and dining-out sectors, which are major factors driving inflation, he explained, "We are focusing on minimizing inflationary pressures by partially alleviating industry burdens caused by raw material price increases through a 0.5 percentage point reduction in interest rates on funds for purchasing food and feed raw materials, and by suppressing government soybean import price hikes."

He also conveyed, "Efforts to support supply and demand management are being doubled, including expanding the quota for tariff-rate quotas on substitute feed raw materials such as hulless barley (from 40,000 to 250,000 tons) and wheat bran (from 30,000 to 60,000 tons), early auction of soybean import quotas in March (normally April-May → March), and alternative bidding for feed and food corn."

To respond to inflation in the communication sector, he stated, "In consultation with mobile carriers, we plan to support youth-tailored data promotions such as free data on job sites and additional data provision until the end of May," and added, "We will continue efforts to reduce communication cost burdens for vulnerable groups by creating conditions for launching affordable budget phone plans through further reductions in budget phone wholesale prices and providing fee support for 19 educational sites including EBS."

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