South Korea will extend its fuel tax cuts by another 2 months | Forexlive

South Korea’s finance ministry said that it will extend the tax cut on fuel for two more months

• Out to February 2025

South Korea has implemented a series of fuel tax cuts since 2021 to alleviate the financial burden on consumers amid fluctuating global oil prices and inflationary pressures. Extensions to the cuts have been ongoing.

Timeline of Fuel Tax Adjustments:

• November 2021: The government introduced a temporary fuel tax cut to mitigate the impact of rising oil prices on consumers.

• June 2024: The tax cut was extended by two months, with reductions adjusted to 20% for gasoline and 30% for diesel and liquefied petroleum gas (LPG) butane.

• August 2024: Amid rising crude oil prices, the government extended the tax cuts through October, maintaining the existing reduction rates.

• October 2024: The tax cuts were extended for an additional two months until the end of December, with the reduction rates scaled back to 15% for gasoline and 23% for diesel and LPG butane.

Impact on Consumers and Economy:

These tax adjustments have been instrumental in stabilizing domestic fuel prices and controlling inflation. However, they have also led to concerns about reduced tax revenues and potential long-term fiscal implications. The government has indicated that future adjustments will consider global oil price trends, inflation rates, and overall economic conditions.