South Korea Extends Fuel Tax Cut to Ease Winter Burden

The South Korean government has announced an extension of its temporary fuel tax cut by two months, aiming to alleviate the financial burden on households during the winter months. Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok made the announcement on a KBS radio broadcast on November 28.

Originally scheduled to end on December 31, the measure seeks to support household consumption amid economic sluggishness. Restoring the fuel tax to its original state could have placed additional financial strain on households, potentially dampening consumer spending. The reduction rates will maintain the current levels of 15% for gasoline and 23% for diesel and butane.

Additionally, the temporary individual consumption tax measure for power generation fuel will be extended for six months, and the measure to lower tariffs on liquefied natural gas (LNG) used for city gas to 0% will be extended for three more months until March next year. The temporary fuel tax cut measure, which started in November 2021, has been ongoing for 37 months.

The extension of these measures is particularly significant during the winter season when energy consumption typically rises. By reducing the cost of heating fuels and electricity, the government aims to ease the financial burden on households during the colder months.