Seoul to gradually phase out fuel tax relief by year-end

SEOUL, October 22 (AJP) -South Korea will begin winding down the fuel tax relief that has been in place since the post-pandemic inflation surge, the Ministry of Economy and Finance said Wednesday. 

The measure, which had been scheduled to expire at the end of October, will be extended through the end of the year — though at reduced rates — to “avoid overburdening consumers,” the ministry said in a statement. 

Starting November, the gasoline tax cut will be lowered from 10 percent to 7 percent, while the diesel and LPG butane cuts will drop from 15 percent to 10 percent. The revised rates translate into tax savings of 57 won per liter for gasoline, 58 won for diesel, and 20 won for LPG butane — meaning consumers will see price increases of roughly 25 won, 29 won, and 10 won per liter, respectively. 

The government has maintained the fuel tax cuts since late 2021 to mitigate inflationary pressures and support household spending amid sluggish economic recovery.