Government Lowers Legal Maximum Limit on Fuel Tax... Expands Public Transportation Deduction to 80% (Comprehensive)

1st Emergency Economic Ministers' Meeting

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is presiding over the 1st Emergency Economic Ministers' Meeting at the Government Seoul Office Building on the holiday, June 19. 2022.6.19
[Photo by Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] The government has decided to expand the fuel tax reduction rate from the existing 30% to the legal maximum of 37% by the end of the year. The credit card deduction rate for public transportation in the second half of the year will also be doubled from 40% to 80%.

On the afternoon of the 19th, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho presided over the 1st Emergency Economic Ministers' Meeting at the Government Seoul Office and stated, "We intend to urgently implement measures to alleviate the burden on ordinary citizens caused by high oil prices."

With this additional fuel tax cut, gasoline will be further reduced by 57 KRW per liter (247 KRW→304 KRW), diesel by 38 KRW (174 KRW→212 KRW), and liquefied petroleum gas (LPG) by 12 KRW (61 KRW→73 KRW).

Deputy Prime Minister Choo also announced, "To ease the fuel cost burden on the freight and transportation industries, we will lower the standard price for diesel fuel price-linked subsidies from 1,750 KRW per liter to 1,700 KRW, a 50 KRW reduction." The fuel price-linked subsidy will be temporarily extended until September.

Additionally, he said, "For domestic aviation fuel, we will apply a tariff quota, reducing the current import tariff from 3% to 0%, thereby alleviating upward pressure on domestic flight fares," and added, "To promote public transportation use and reduce the burden on ordinary citizens due to high oil prices, the credit card income deduction rate for public transportation in the second half of the year will be doubled from the current 40% to 80%."

Ahead of the announcement of the electricity rate increase plan on the 21st, Deputy Prime Minister Choo stated, "Electricity and gas rates, which are facing increased production cost burdens due to the sharp rise in international energy prices, will be minimized through painful self-help efforts."

However, he added, "In principle, public institutions and local governments will absorb cost increases as much as possible through management efficiency," and "Central and local public utility fees such as railways, postal services, and water supply and sewage will be frozen in the second half of the year as a principle and managed as stably as possible." Accordingly, toll fees, railway fares, postal fees, metropolitan water supply fees, and vehicle inspection fees will be frozen. The reduction of airport facility usage fees will be extended until the end of this year.

Furthermore, local public utility fees such as water supply and sewage fees, garbage bag fees, city bus fares, taxi fares, and subway fares will also be managed by the Ministry of the Interior and Safety and local governments to be frozen as much as possible.

Regarding agricultural and livestock products expected to see price increases ahead of the summer season, Deputy Prime Minister Choo said, "We will monitor market trends daily focusing on price-increasing items and stabilize the market through timely responses such as releasing stockpiled goods, emergency imports, supply and demand management, and price discounts," and added, "We will also consider additional measures to stabilize supply and demand, such as expanding the application of tariff quotas depending on market conditions."

Deputy Prime Minister Choo emphasized support for vulnerable groups affected by price increases, stating, "Starting from the 24th, payments of up to 1 million KRW (for a family of four) will begin for 2.27 million low-income households," and "Energy vouchers for 1.18 million low-income households using energy will also be implemented from the 1st of next month."

He said, "In this severe situation, the economic team will not let its guard down for a moment," and "Under the responsibility of each ministry, we will conduct daily checks on price and supply-demand trends for key items in their respective areas and respond immediately if signs of instability are detected."

At the first Emergency Economic Ministers' Meeting of the Yoon Suk-yeol administration held that day, Deputy Prime Minister Choo was joined by ministers from the Ministry of Science and ICT, Ministry of Agriculture, Food and Rural Affairs, Ministry of Trade, Industry and Energy, Ministry of Land, Infrastructure and Transport, Ministry of Oceans and Fisheries, and the Office for Government Policy Coordination, among other related ministries.

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