Choo Kyung-ho: "Fuel Tax Cut Extended Until Year-End"

Emergency Economic Ministers' Meeting on the 16th, Monitoring Israel-Hamas Developments
"Difficult to Rule Out Future Global Inflation Reacceleration Risks"

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho announced on the 16th that “the fuel tax reduction measure and the diesel and natural gas price-linked subsidies will be temporarily extended until the end of the year.” This decision was made to extend the fuel tax reduction measure, which was originally scheduled to end in October this year, due to increased volatility in international oil prices following the Israel-Hamas conflict.

At the emergency economic ministers' meeting held at the Seoul Government Complex on the same day, Deputy Prime Minister Choo stated, “While paying attention to recent domestic and international price uncertainties, we will strengthen management efforts focusing on energy and food, and devote all efforts to stabilizing people’s livelihoods and prices.”

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is delivering opening remarks at the 'Emergency Economic Ministers' Meeting' held on the 5th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Jo Yong-jun jun21@

The fuel tax has been reduced by 25% for gasoline and 37% for diesel through flexible tax rate adjustments, applying 615 KRW per liter for gasoline and 369 KRW per liter for diesel. The government expanded the fuel tax reduction for gasoline and diesel to 37% in July last year, then reduced the gasoline tax cut to 25% starting this year and extended the measure twice more. The price-linked subsidy system supports freight transport operators such as cargo trucks, buses, and taxis by covering 50% of the excess amount when fuel costs exceed a certain threshold.

Deputy Prime Minister Choo noted, “Although international oil price volatility has increased since the Israel-Hamas conflict, there is currently no disruption in energy supply, and the direct impact on the financial and real sectors remains limited.” However, he added, “Depending on how the situation develops, risks may spread again, especially in energy and supply chains, potentially causing difficulties once more in a global inflation phase that had been somewhat easing.”

He continued, “Given the possibility of a sharp rise in international oil prices and the resulting significant volatility in the real economy, financial, and foreign exchange markets, we will maintain heightened vigilance and strengthen 24-hour monitoring of financial and real sectors.”

On the same day, the government also discussed measures to resolve regional job vacancies and responses to the European Union (EU) Carbon Border Adjustment Mechanism (CBAM), among other topics. Deputy Prime Minister Choo said, “We will select industries with high regional job vacancies and promote regional job vacancy resolution projects designed directly by local governments and supported directly by the central government.”

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