SEOUL: The South Korean government announced that it will extend the current fuel tax cut by two months, albeit with some adjustments, as the nation grapples with the economic impact of the ongoing Middle East crisis. This move aims to alleviate inflationary pressures caused by rising global oil prices.
According to Yonhap News Agency, the Ministry of Economy and Finance will implement a 15 percent discount on gasoline consumption and a 23 percent cut on diesel and liquefied petroleum gas starting November 1. Previously, South Korea was offering a 20 percent discount on gasoline and a 30 percent discount on diesel and liquefied petroleum gas, which were scheduled to expire at the end of this month.
The finance ministry stated that the decision to adjust the discount rates was influenced by recent trends in energy prices and inflation, and their impact on the nation’s finances. The government has been applying a fuel tax cut since 2021, adjusting the reduction rate in response to fluctuating global energy co
sts. South Korea’s reliance on energy imports has made it vulnerable to price hikes, contributing to increased inflationary pressures domestically.
The extended tax cut will be in effect through the end of this year, providing temporary relief as the government continues to monitor the situation and its economic consequences.